Hello there,
I understand that you might be wondering if you need to send Form 1099 to a foreign contractor who is performing their services outside of the US. Here's what you need to know:
According to the IRS and other sources, you do not need to send Form 1099 to a foreign contractor who is not a US person and is providing their services outside of the US. Instead, the foreign contractor will have to fill out and file Form W-8BEN, which certifies that they are not a US taxpayer.
Form W-8BEN is used by the IRS to keep track of the income generated by non-US citizens and foreign businesses when contracting with American companies. Although this form is not submitted to the IRS, you need to keep it on file in case of an audit.
If the foreign contractor cannot prove exemption from withholding, your organization is required to withhold 30% of all income generated to be paid later as tax. Therefore, it's crucial to ensure that the required forms are collected and filed according to the IRS guidelines.
You can refer to this Form W-8 BEN to check for the qualifications: https://www.irs.gov/pub/irs-pdf/fw8ben.pdf
If you need more information about 1099 form and things to know when preparing your form 1099, you may refer to this article:
Please feel free to reach out to me if you have any other concerns regarding 1099 form in QuickBooks. I'd be more than happy to assist you. Have a great day.
