What is a Form 1042-S?
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Form 1042-S is a tax form used by the Internal Revenue Service (IRS) in the United States to report income tax withheld from foreign persons on income that is effectively connected with a trade or business in the United States. The form is used by organizations that make payments to foreign persons, such as businesses, government agencies, and other organizations, to report the amount of tax withheld from those payments.
Form 1042-S is typically used in situations where an individual or organization has received income that is subject to withholding, such as wages, salaries, or other types of compensation.
In the GIG economy it can also be used to report the withholding on consulting fees or even payments to You Tubers.
The form is used to report the amount of tax that was withheld from those payments and to claim any credits or deductions that may be available to the foreign person. The foreign person can then file a Form 1040NR to reclaim the withholding under various US Tax Treaties.
Form 1042-S is typically filed annually, which is used to report the amount of income paid to foreign persons and the amount of tax withheld. The forms are used to help ensure that foreign persons are paying the correct amount of tax on their income earned in the United States and to help the IRS track and verify compliance with tax laws.
Written by John M Matras CPA MBA Copyright 2022. Tax news you can use is a feature to the subscribers of the mytax.today app and JM Matras CPA Incorporated. All rights reserved.