Tax & Accounting Blog

Form 1042-S Information Reporting to Non-U.S. Persons Part 2: Payments Not Reportable on Form 1042-S

Form 1042-S Information Reporting to Non-U.S. Persons Part 2: Payments Not Reportable on Form 1042-S

Income payments not subject to NRA withholding are also not subject to Form 1042-S reporting. They include: • Income excluded from income under section 61 (e.g., qualified scholarships and fellowships). • Proceeds on sales of U.S. real property interests by non-U.S. persons (use Form 8288). • Partnership profits reported by the partnership to a … Read More

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Switzerland and the United States Sign Bilateral Intergovernmental Agreement for Implementation of FATCA

The U.S. Department of the Treasury has announced the signing of a bilateral agreement with the government of Switzerland to facilitate implementation of the information reporting and withholding tax provisions of the Foreign Account Tax Compliance Act (FATCA). “Today’s announcement marks a significant step forward in our efforts to work collaboratively to combat offshore … Read More

Form 1042-S Information Reporting to Non-U.S. Persons Part 1

Form 1042-S Information Reporting to Non-U.S. Persons Part 1

Income payments made to non-U.S. persons must be reported on a Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, not on a Form 1099. Unlike Form 1099-reportable payments, there is no reporting exception for payments to corporations and no minimum dollar threshold for reporting on Form 1042-S. Reporting on Form 1042-S is … Read More

Changes coming in tax treaty between the United States and Japan

Changes coming in tax treaty between the United States and Japan

A new protocol to the income tax treaty between the United States and Japan has been signed by representatives of both countries, but its provisions will not enter into force until both countries have completed ratification of the protocol.  It amends the tax treaty, which has been in effect since 2003, to update several provisions … Read More

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FATCA Final Regulations issued, provide rules for new tax documentation and withholding regime

The Final Regulations for Chapter 4 of the Internal Revenue Code, sections 1471 through 1474 known as the Foreign Account Tax Compliance Act or “FATCA,” have been issued. The official date of publication in the Federal Register is scheduled to be January 28, 2013. The IRS has made the complete text, TD 9610, available at … Read More

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 8 – Exempt Individuals

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 8 – Exempt Individuals

Exempt Individuals are exempt from counting U.S. days for purposes of determining substantial presence in the U.S., nothing more. They are not exempt from tax because of their status as Exempt Individuals, although such Exempt Individuals are frequently exempt from income tax under a Code or tax treaty provision. To avoid this confusion, the IRS … Read More