I am a US citizen who lives abroad, and runs a small company (the equivalent of a sole proprietorship). I will be filing US taxes, but also local taxes, and I usually qualify for the foreign-earned income exclusion. I hired the services of a US based independent contractor for over $600. Am I required to issue a 1099-MISC form?
If you are claiming an expense (deduction) on your U.S. return for the services of the US based independent contractor, foreign-income exclusion notwithstanding, you are required to report the payment on Form 1099-MISC.
From Instructions for Form 1099-MISC
File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year at least $600 in services performed by someone who is not your employee (including parts and materials), box 7;
Trade or business reporting only. Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit.
There is no distinction made for payments coming from a foreign country. In fact the Form 1099-MISC specifically mentions the option of a foreign address for the payer.
(PAYER’S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no.)
If you are claiming an expense (deduction) on your U.S. return for the services of the US based independent contractor, foreign-income exclusion notwithstanding, you are required to report the payment on Form 1099-MISC.
From Instructions for Form 1099-MISC
File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year at least $600 in services performed by someone who is not your employee (including parts and materials), box 7;
Trade or business reporting only. Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit.
There is no distinction made for payments coming from a foreign country. In fact the Form 1099-MISC specifically mentions the option of a foreign address for the payer.
(PAYER’S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no.)