Generating a 1042 and 1042s form

[IntlTeacher]

I have an LLC, which is a partnership company between me (US Citizen) and one other person (Foreign citizen, non-US Person, non-US resident) and we split all profit 50%/50%. I used TurboTax business to generate Schedule K-1 for each of us. However, it is my understanding that I also need to provide my partner with a 1042S and file a 1042 with the US Government. I created an account with the https://1042sdi.for.irs.gov/ website, and I read Publication 515 (which I found VERY long and confusing.)

Because I need to generate K-1s, I purchased and used TurboTax Business CD Download for Windows. It asked the question about whether I need to submit 1042s. I clicked Yes and it ticked that box on my 1065. However, it didn't ask me any questions that would help me create the 1042 or the 1042s. And it didn't generate them.

I can't figure out a way to get TurboTax Business CD Download for Windows to assist me in the creation of these 2 forms. And I'm super confused about which Income Code and Chapter 2 Status Code and Exemption Code I should use. 

Is there a way that I can use a TurboTax product (one that I already have or another one that I can purchase) to help create these forms? 

BTW - when I search the community for 1042 forms, I find a lot of people who want to submit them, and none who want to create them. I understand that TurboTax for individuals may not help non-US people with the submission of their 1042s form. That's not what I'm trying to do.

Any advice is appreciated. Also, any advice on ways to contact TurboTax Support in a way that would help explain to them what I'm trying to do would be appreciated. I'm not having much luck on the phone with this.

[Anonymous_]

The only way to contact Support in your situation would be via telephone.

See What is the TurboTax phone number? (intuit.com)

Since the program (TurboTax Business) does not support Form 1042-S, I am not sure Support can do anything to assist you, however.

If you are hopelessly lost, you should really consider contacting a local tax professional.

[IntlTeacher]

Thanks. I wouldn't say I'm hopelessly lost. I've just gotten used to the way TurboTax works. I really like how it asks me questions and guides me through the forms I need to fill out. Form 1042 is really complicated, and Publication 515 doesn't make it much clearer. I would expect that a computer-based program could make it easier to fill that form out. And I had assumed incorrectly when I purchased and downloaded TurboTax Business that it would help me with those forms. I was really hoping to avoid having to deal with a tax advice company in person but that appears to be my next step.

[Anonymous_]

The form is due March 15th, but you can file an extension (Form 7004) if you need more time to file.

Unfortunately, it appears as if a consultation with a local tax professional in this case is inevitable.

[yuan60101]

God! I run into the same problem you had, but now is 2025!!! Just found TurboTax for Business still does not support LLC with Non-resident members who need 1042s!!! That means they did nothing in these 3 years to improve their software since you reported!!!

If you see my msg, could you tell me what you did for you LLC filing? Did you file 1042s ONLY for the payments which need the withholding? Or for every kinds of payments, that would 20 to 30 1042s forms that I need to fill out?

[DaveF1006]

According to the IRS, you would file a 1042 S if the partnership must withhold tax on a foreign partner's distributive share of fixed or determinable annual or periodical gains and income (FDAP income) not effectively connected with a U.S. trade or business, as well as withhold on any other FDAP income paid to a foreign person regardless of whether he is a partner or not. Also a 1042 S may be reported if there is a Withholding Related to FATCA (Foreign Account Tax Compliance Act).  

If the partnership has taxable income effectively connected with a U.S. trade or business that is allocable to a foreign partner, the partnership must withhold tax under IRC Section 1446. This withholding tax must be reported and paid using Forms 8804, 8805, and 8813.

Helpful hints for partnerships with foreign partners

Instructions for Form 1042-S (2025)

U.S. Partnerships With Foreign Partners: A Look at Withholding and Reporting Obligations

[yuan60101]

Hi DaveF1006,

Last year, our LLC's income is ONLY from a US brokerage account: Interest (including treasury bond), dividend, and long and short term capital gains (CG).

I know we need file 1042s for the Dividend withholding for our foreign partners who did not live or came to US.

But my question is: Do we also need to file 1042s for them for the interest and CG ?

[DaveF1006]

According to this IRS source, it states If during a partnership's tax year the partnership has taxable income effectively connected with the conduct of a trade or business within the United States that is allocable to a foreign partner, the Internal Revenue Code requires the partnership to report and pay a withholding tax under IRC section 1446 to the IRS. 

Reporting means reporting the interest and capital gains as well as the withholding taxes that was levied against the foreign partners.

@yuan60101 

[yuan60101]

Hi @DaveF1006, Thanks for your time! You know the interest and CG are exempted from tax for foreign partners. Then why do we need to file the interest and CG on 1042s? 1042s by the name is Foreign Person's U.S. Source Income Subject to Withholding, but there is no withholding on the interest and CG, right?

[DaveF1006]

Yes, you are correct.  Interest and Capital Gains are not reportable unless they are effectively connected with a US business. Capital Gains are not taxable either unless the partner stayed in the US for 183 days during the tax year.

If these conditions are met, the income isn't taxable nor a 1042 S would be issued because there were no withholdings to be made. If dividends were paid however, then this is taxable income and withholding tax would need to be withheld at 30%. This would then be reported on a 1042 S.

This IRS document explains this well.

Federal income tax withholding and reporting on other kinds of U.S. source income paid to nonresiden...

@yuan60101 

[yuan60101]

Hi @DaveF1006  Thank you so much for the link you provided which has a lot of very useful info!! Yes, I already filled the withholding dividend on 1042s myself since TurboTax business does not create the form. Then can I still  file the LLC return through TurboTax business online(without 1042s and 1042), and mail 1042s and 1042 separately?? This is very important, because, if I am allowed to do that, I don't have to return the turbotax product which the turbotax representative asked me to do. Do you understand what I am saying?

[DaveF1006]

Yes. you can still file the LLC return online and mail all 1042's separately.  

[yuan60101]

 @DaveF1006 That's great!! Sincerely appreciate your help and time!! I'll certainly do that. If you are working for TurboTax, I have a suggestion that you might want to send to your business team: it would be a good idea to pop a message when form1065 Schedule B Question 19 is clicked for 'YES', something like 'You'll need to fill out and file 1042s and 1042 by yourself, But you can still file the return through TurboTax Business'. A similar message for Question 14 to form 8805. In this way the partnership may still choose to use TurboTax Business instead to looking for an accountant to do the return.