1042-S Reporting

1042-S Reporting


We are trying to familiarize ourselves and establish a 1042 process. Below are our questions. 1) We have never filed a 1042. Our company was established in Nov 2002. Do we have past reporting obligations? If so, how far back should we report? 2) Based on our experience with 1099 reporting, we know there are certain exceptions where we do not have to report vendor payments. For example, a) payments made to reinsurance company for premiums, b) corporate (except law firms and medical practices) etc. Are there any exceptions that apply to 1042 reporting? 3) Once we determine our foreign vendors, what W-8 should we send out? Is there an "expiration date" on a W-8? 4) How does withholding work? Specifically, when are we required to withhold? Is it like the 1099 where you withhold at 28% when the vendor does not provide the W-9 information or do you automatically withhold 30% on every payment? 5) How do we report vendors that are paid in a currency other than USD? 6) Please confirm that there is no minimum reportable amount. 7) Our parent company is located in Bermuda. There are certain expenses that are paid by our parent and then they are billed to us. We are paying our parent company back. How is this treated? For example, on our behalf the parent co. pays the entire invoice and bills out to us our portion. 8) An employee has a business trip in the UK and uses a car service. The car service sent an invoice. Please advise whether or not this payment is reportable or not.

< . . .

[Full text available to TIR Answer Center subscribers only. Click here for subscription information.]

Any tax advice in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency. This written or electronic communications does not represent legal advice. Persons in need of a legal opinion should seek competent counsel.
Steven Mercatante, Esq. specializes in tax topics. Steven is a nationally recognized leader in tax reporting education and consulting on specialized compliance issues. He received his Juris Doctor from the Michigan State University College of Law, graduating with a Certificate of International Law. He is an active member of the State Bar of Michigan.