A Brief Overview of the Form W-9 and W-8 for Purposes of Withholding
By Anthony DiosdiThe United States taxes the gross amount of a foreign person’s U.S.-nonbusiness income at a flat rate of 30 percent. Any person having control, receipt, custody, disposal, or payment of an item of U.S. source income to a foreign person may have an obligation to withhold U.S. tax. A person who fails to withhold is liable for the uncollected tax. Consequently, anyone making payments to foreign persons or entities must ensure that the appropriate amount of tax is withheld and paid to the U.S. government. An individual withholding taxes must deposit the funds with a Federal Reserve bank or an authorized financial institution using a federal tax deposit coupon or by electronic transfer. The individual must also file Form 1042, Annual Withholding Tax Return for U.S. Source Income…