harryparker77[at]gmail.com posted:

- quote -

I assume your friend has a small business, which results in preparation
of a Schedule C. He can simply report "Software" as an expense item and
enter the total cost, as one of the expenses of conducting his business.

The invoice he receives from the software designer would simply be
retained with other receipts and invoices in his business records.
There is no requirement to report the name or location of suppliers who
provide services or products on Schedule C.

Bill

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<harryparker77[at]gmail.com> wrote
- quote -



Yes. As long as it's an expense of his business that is both ordinary and
necessary, and reasonable in light of all facts and circumstances.




- quote -




There's not a form. There's no requirement for the US firm to file an
Indian equivalent of a 1099.

He reports the expense as he would all other like-type expenses (as cost of
sales, consulting, etc or so on) - on his business return. He just needs to
keep the records (receipts, invoices, etc) that supports the payment.





--
Paul A. Thomas, CPA
Watkinsville, Georgia

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A friend of mine is hiring a company back in India to do software
work. Now this would classify the Indian company as a non resident
foreign alien with no SSN or TIN. Plus the services are performed
outside USA. So the company in India pays taxes on this earned income
back there but how does my friend write it off to IRS as an expense
related to paying to non resident alien for services performed outside
USA. I guess what I am looking to know is what form does he use and
what details does he need to fill it for the foreign organization to
report his expenses?

Any help would be greatly appreciated
Harry

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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. > << ------------------------------------------------------- >