STATUS: I’m being sarcastic in that subject heading.
What’s playing on the iPod right now? LONG HOT SUMMER by The Style Council
One of the drawbacks of having foreign clients is the accounting. (Don’t worry Sarah Rees Brennan—I still love you!). Today was all about figuring out the tax issue for Sarah because she is Irish and currently lives in Ireland but we sold her book to a U.S. publisher.
Here’s what we had to do (we being all involved, me, my tax person, and Sarah’s Irish tax person). First, we looked up the tax treaty between the U.S. and Ireland (and it differs depending on the country). Luckily for me, per the tax treaty, my agency does not have to withhold any income tax and Sarah will be taxed in Ireland on the income received.
So great. I don’t have to withhold or send monies to the IRS but no, my job is not done yet. I still have to have Sarah fill out the W8-BEN form for my files. Then I have to file form 1042, 1042-S, and 1042T (transmittal form) just to show that she is exempt and I didn’t withhold monies per the tax treaty.
Which means I’m filling out numerous forms so I can simply put the number zero on all the appropriate lines.
To verify, I called the IRS just to make sure that we had all the necessary forms in hand and nothing was missing. This took 2 hours and a transfer to no less than four departments at the IRS.
Needless to say, I’m not completely confident that even the IRS knows exactly what has to be done but I’m sure they’ll tell me if I neglected a form!