Hey there youtube so in this video i wanted to cover how to complete irs form 1042 s so this form 1042s is titled foreign persons u.s source income subject to withholding so when do you need to complete this form anytime you as a u.s payor are making payments to a foreign person so it's a non-resident individual or non-resident company and it's of us source income you generally need to file this form and it's also filed whether there's any withholding tax or not if you have withholding tax you definitely need to file this because you have to appropriately record how much income was paid to the non-resident and how much tax is being withheld and sent to the irs so i've got a sample form in front of us and then one slide that we're just going to go over really quickly and then we'll jump back to the form itself okay so the form like i said it is required to report u.s source payments to non-residents and this applies whether or not any withholding tax is required so for example a lot of u.s source interest payments must be reported to non-residents however they're never they're generally not subject to tax or withholding under chapter 3 because of portfolio interest exemption so for example if a non-resident opens a bank account with a u.s bank and it's a savings account and they earn let's say a thousand dollars in port in interest income on that account interest income on u.s bank accounts is generally portfolio interest so the bank might be reporting the interest to the non-resident as u.s source bank interest but there's no withholding tax in this example what we're going to do is we're going to look at u.s source dividends...
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About Form Instruction 1042-S
Form Instruction 1042-S provides guidance on how to fill out Form 1042-S, which is a US tax form used to report various types of income paid to foreign individuals, entities, or organizations. The form is required to be submitted by withholding agents, including US businesses, institutions, and organizations that pay certain types of income to foreign individuals or entities. Some examples of the income that may be reported on Form 1042-S include: 1. Compensation for personal services performed in the US, which is subject to withholding under the Foreign Account Tax Compliance Act (FATCA). 2. Scholarship or fellowship grants provided to nonresident aliens. 3. Interest, dividends, or other types of fixed and determinable annual or periodical income (FDAP). 4. Certain gambling winnings subject to withholding. 5. Royalties paid to foreign individuals or entities. 6. Nonresident alien's income not effectively connected with a US trade or business. The purpose of Form 1042-S is to ensure proper reporting and withholding of US income paid to foreign individuals or entities, as required by the Internal Revenue Service (IRS). The form provides detailed instructions on how to fill out each part and also includes information about the different codes used to identify the type of income being reported. Ultimately, anyone who processes payments to foreign individuals or entities as a withholding agent should refer to Form Instruction 1042-S to correctly report the income on Form 1042-S. This includes employers, universities, financial institutions, and other entities making payments subject to withholding to foreign recipients.
What Is Form Instruction 1042-S
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