Payments

[TAX]

Client, scorp, pays, in dollars, by check, to consultants out of USA when for ousourced the work to Polnad, India etc.

(1) Do you issue 1099?

Thanks!

[taxea]

Payments

Depends on how much he pays to any one person in a year and whether he wants to take the expense deduction.taxea

[TAX]

Depends on how much he pays to any one person in a year and whether he wants to take the expense deduction.taxea

Amount issued will be $15,000 or more for each person overseas

[Lion]

Form 1042

Isn't there a form such as Form 1042 or 1043 for payments made to someone overseas without a SSN? You/your client should certainly check on that for amounts that large.

[David1980]

1042 is used to report tax withheld. I don't think you would have a withholding requirement when you outsource like that, so I don't think 1042 would apply. Though I'm not sure what would.

[travis bickle]

I think Form 1042S is just dandy for this

1042 is used to report tax withheld. I don't think you would have a withholding requirement when you outsource like that, so I don't think 1042 would apply. Though I'm not sure what would.

Here are the general instructions/statement from the reverse side of F1042S:

Generally, every nonresident alien individual, nonresident alien
fiduciary, and foreign corporation with United States income,
including income that is effectively connected with the conduct of a
trade or business in the United States, must file a United States
income tax return. However, no return is required to be filed by a
nonresident alien individual, nonresident alien fiduciary, or a foreign
corporation if such person was not engaged in a trade or business in
the United States at any time during the tax year and if the tax
liability of such person was fully satisfied by the withholding of
United States tax at the source.

The F1042S is used to report the amount of United States income, type of income, and withholding [if any].
If the individual[s] involved do not have any withholding, that does not excuse them from the necessity of paying taxes to Uncle Samuel.

[David1980]

The F1042S is used to report the amount of United States income

Precisely, so the question is does this foreign person have any United States income?

[travis bickle]

Yes

Precisely, so the question is does this foreign person have any United States income?

please re-read this portion of the instructions from the back of F1042S and explain how the monies in question do not fit this part of the definition:
.....
including income that is effectively connected with the conduct of a
trade or business in the United States

[joanmcq]

but does an outsouced IC meet the definintion of effectively connected? I'm not disagreeing necessarily, but am curious.

And the textbook for a course I just took in this is at home....