Startup Q&A
What does a US based company need to do to comply with IRS regulations in paying foreign contractors?
CEO and Founder of Kruze Consulting
Table of contents
What should I do when I pay a foreign or overseas contractor?
In general, a startup will only need to collect a W8BEN form from a developer or professional in order to collect their info. No tax withholding necessary. I highly recommend using Track1099 to collect these forms (+ W9s) and keep you in check. Filing form 1042 for startups is rare, but I have seen a few cases.
On occasion (for startups that is), you may need to withhold taxes. This usually applies to royalties, athletes, artists, etc. Consult your CPA, but here’s a quick snapshot of what types of they’re looking for:
Table of contents
Recent questions
Top viewed questions
- What happens if the IRS audits me and I do not have the receipt for an expense (assuming it was a legitimate expense)?
- How should convertible note financing be handled on the balance sheet?
- For startups incorporating in Delaware, what firms are good registered agents to use?
- How do startups account for equity and fundraising on the Balance Sheet?
- What does a US based company need to do to comply with IRS regulations in paying foreign contractors?
