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What does a US based company need to do to comply with IRS regulations in paying foreign contractors?

Vanessa Kruze Kruze Consulting

Vanessa Kruze

CEO and Founder of Kruze Consulting

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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:

types of income


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