<creubank[at]yahoo.com> wrote
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As some kind of expense. "Software consulting" might be appropriate.




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You don't need to issue a 1099 for payments made to a forgien entity.






--
Paul A. Thomas, CPA
Watkinsville, Georgia

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I am looking for some guidance on the treatment of payment for
services to a non-US consultant.

I paid a foreign (China-based) consultant to do software development
for my LLC this year. This person is a "non-resident alien" who has
not visited the US for this work. All work was done in China.

According to Publication 515: "Services performed outside the United
States. Compensation paid to a nonresident alien (other than a
resident of Puerto Rico, discussed later) for services performed
outside the United States is not considered wages and is not subject
to withholding."

How should I report this cost on my Form 1065? Based on the above
explanation, I assume it should not be "Salaries and wages". Perhaps
"cost of goods sold" (Cost of Labor) or "other"?

Because the individual does not need to file a US tax return, I will
not apply for an ITIN, nor will I issue a 1099. Is this correct?

Since the income is not subject to withholding, I will also not file a
1042-S for the foreign consultant.

Curtis Eubanks

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >