Companies in the US

Form W-9: What is it and what is it for?

Filling out tax return forms to the IRS (Internal Revenue Service) is a process that requires attention and care as there is a wide range of questionnaires and information that must be reported. In the case of service providers, there are some specific documents that must be up to date. This is the case with the W-9 form. The W-9 form, also known as “Request for Taxpayer Identification Number and Certification,” needs to be filled out by independent employers, self-employed service providers or a company that provides services to another company, the so-called “contractors” and “subcontractors.” It is an Internal Revenue Service (IRS) form and must be provided by the contractor to the client who, based on the information obtained therein, will certainly issue a Form 1099-NEC to inform the contractor and also the IRS of the total amount paid during the fiscal year to the respective service provider. Who does the W-9 form apply to? There are four situations in which a W-9 is required: When hiring a freelancer: this is the most common case of W-9 withdrawal. When a company hires self-employed professionals, US tax residents, or other US companies to provide services, it must request the provision of a W-9 prior to the commencement of employment. In the case of opening bank accounts: Banking institutions must, in some cases, send information about their customers to the IRS. This is what happens when interest is collected throughout the year. In this context, the W-9 can be used to collect this information. When canceling debts:If a creditor cancels a customer’s debt, the amount of the canceled debt can be included in taxable income.Therefore, the creditor must submit information to the IRS using the information on the W-9 form. In investment companies: Investment firms may request a W-9 from clients to report to the IRS information relating to earnings or dividends earned by the investor. What information is required on a W-9 form? The W-9 is used to collect each taxpayer’s private information: name, address, and identification number (employer identification numbers for businesses (EIN) and Social Security numbers for individuals (SSN)). You must also state whether your business has a trade name, and also what the tax classification of the business or company is (if it is a limited-liability sole proprietorship or sole proprietorship, if it is a C-Corporation, S-Corporation, Partnership, Trust or Estate, or yet another type of organization). Is there a deadline for submitting a W-9 form? Since the W-9 is not collected directly by the IRS, there is no specific deadline for filling out the form. However, there is a deadline for filing out the Form 1099. The contracting company must, obligatorily, send the form 1099-NEC to its contractors and to the IRS by the last working day of January of the year following the fiscal year in question, so that taxpayers can report their revenues from the provision services on their respective tax returns to the IRS. Because it is a form that can often raise questions, it is best to have the help of a professional accountant to fill out  the document. Need help filling out your W-9 form? Please, contact us. We’ll be happy to help you!

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AgTech business opportunities for Brazilian companies in the US

To talk about the promising market of Brazilian AgTechs and their possibilities for international expansion, the Brazilian-American Chamber of Commerce of the Southeast (BACC-SE), in partnership with the Consulate General of Brazil in Atlanta, and support from Drummond Advisors, promoted webinar “AgTech Business Opportunities for Brazilian Companies in the US”. The event was attended by Henry Berger, Brazil Country Manager at VetFamily; Marcelo Pereira de Carvalho, CoFounder of AgTech Garage; Diogo Ciasulli, Editorial Director of Feed & Food Magazine; Bernardo Costa, CoFounder of Agroven; Danilo Leão, CEO of Bovcontrol; Fernando Spohr, Operations Manager, North America at Apex-Brasil, and Reginaldo Zandonade, General Manager at Forquimica. The chat was moderated by Pedro Drummond, partner at Drummond Advisors. Lucia Jennnings, president of BACC-SE, opened the panel, which also had the special participation of Ambassador Nestor Forster Jr (Embassy of Brazil in Washington, DC) and Ambassador Carlos Abreu (Consulate General of Brazil in Atlanta). During the live, the speakers commented on the current scenario of AgTechs in Brazil, the challenges and advantages offered by internationalization to the United States, in addition to addressing industry trends for the coming years. Check out the full chat on our YouTube channel (Webinar in Portuguese): Got any questions? Please contact us at info@drummondadvisors.com.

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North American subsidiary of Brazilian company must comply with US tax obligations

Brazilian companies should keep an eye on the United States Treasury North American subsidiaries of Brazilian companies should be aware of the tax obligations imposed by the United States Treasury. Unlike Brazil, in addition to the Corporate Income Tax, companies operating in Uncle Sam’s land also must meet other tax burdens during the year. Below, we list some of the key forms and reports that need to be filed to the Internal Revenue Service (IRS): Annual reports A form that guarantees the updated registration of the company. The Annual Report must be renewed annually, and noncompliance exposes the company to severe fines and penalties. The obligation must be submitted to the state government where the company is registered. The form presents fields in which basic information should be provided, such as address, societal composition, number of employees, e-mails and contact numbers. Franchise Tax Despite the name, this tax obligation has no relation to franchises. Franchise Tax is applied by some US states to certain business organizations, such as corporations and partnerships. The calculation is based on net equity or capital held by the entity. Form 1042 Does your company in the USA do business with foreigners? Stay tuned! Any individual or legal entity who is a United States resident and makes payments to foreign individuals or entities is subject to taxation exclusively at the source. To keep up with this obligation, it is necessary to file Form 1042. The paying source, or the one who makes the payment, needs to report to the United States Treasury payments such as salaries, dividends, interest, pensions, alimony, royalties and commissions. A form must be completed for each type of payment. The rate applied on payments made by withholding agents—those that are subject to withholding income tax—is 30%. Even individuals and companies exempt from withholding are required to turn over the form to the IRS. Income Reports 1099 and W2 Companies hiring labor and services in the United States must submit these income reports to the country’s tax authorities. Employers need to fill out a W2 form for each salaried employee, stating the total amount of compensation paid in the previous year. Form 1099 should describe payments made to outside service providers who received more than USD 600. Be aware: in addition to the obligations described above, there are still other ones that your company must carry out, so be sure to always consult your CPA. Share Compartilhar no facebook Compartilhar no linkedin Compartilhar no whatsapp Compartilhar no email Let’s talk?

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