Tax & Accounting Blog

NEW W-8IMY FORM:  DRAFT RELEASED BY IRS

NEW W-8IMY FORM: DRAFT RELEASED BY IRS

The third in a series of revised Forms W-8 has been released, in draft form, by the IRS.  The draft Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding, is part of the process of making the W-8 series of forms serve for purposes of compliance … Read More

Information Reporting on Form 1042-S, A New Challenge for Accounts Payable – Part 2: Payments to Beneficial Owners Recipient Code

Information Reporting on Form 1042-S, A New Challenge for Accounts Payable – Part 2: Payments to Beneficial Owners Recipient Code

In order to report income and taxes properly, payers must generally maintain a record in the name of the income recipient even if payment is made to a different payee. Generally, the recipient named on the Form 1042-S is the individual (Code 01) or entity such as a corporation (Code 02) that is the … Read More

New French Law on the Taxation of Trusts

New French Law on the Taxation of Trusts

On July 29, 2011, France enacted a new law on the taxation of trusts. Under the new law, a trustee must disclose certain information about the trust if the trust has a French settlor, beneficiary or French assets. The trustee must file the disclosure by June 15. The government was to provide further details on how to … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 11: What if the Payment Includes Both U.S. Source and Foreign Source Income?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 11: What if the Payment Includes Both U.S. Source and Foreign Source Income?

If you know that the payment includes both U.S. source and foreign source income and you do not have a reasonable allocation of the U.S. source amount, you must treat the entire amount as U.S. source income. The recipient of the income can submit a U.S. tax return with an allocation of the income between … Read More

Medicare Surtax on Net Investment Income Goes into Effect on January 1, 2013

Medicare Surtax on Net Investment Income Goes into Effect on January 1, 2013

Under the 2010 Health Care reform legislation, a Medicare tax will, for the first time, be applied to investment income beginning in 2013. A new 3.8% tax will be imposed on net investment income of single taxpayers with AGI above $200,000 and joint filers over $250,000. Net investment income is interest, dividends, royalties, rents, gross … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 10: Do I Have to Withhold on Payments for Services Performed Abroad?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 10: Do I Have to Withhold on Payments for Services Performed Abroad?

Compensation for services performed abroad is foreign source income. For audit purposes, the place where the services are performed should be indicated in the agreement with the individual. It is not sufficient that the location where the services performed is indicated on the invoice since this is considered by the IRS to be a self-serving … Read More