How to Report Cross-Border Payments to the IRS on Form 1042-S

How to Report Cross-Border Payments to the IRS on Form 1042-S

Tax Law
By Anthony Diosdi The United States often taxes the gross income received by foreign persons. In addition, the person controlling the payment of the income may need to deduct and withhold U.S. taxes before payment is made to a foreign person. The following types of foreign persons may be subject to U.S. withholding taxes:(i)  Nonresident alien individuals;(ii)  Foreign corporations;(iii)  Foreign partnerships, and(iv) Foreign estates and trusts.A nonresident alien is an individual who is neither a citizen nor resident of the United States. A foreign corporation is a corporation organized or created under the laws of a foreign country. Likewise, a foreign partnership is a partnership organized or created under the laws of a foreign country. An estate is foreign if its foreign-source income, other than any income effectively connected with…
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