None!
Well, maybe we have simplified it a little… Let’s look at it a little more in detail…
You can hire a remote worker as an overseas employee by employing them as a subcontractor, so in the United States, for example, you do not need to submit Form 1099.
However, there are two forms that you should consider: the 1120S and the W-8BEN.
The W-8BEN form is sent by your worker. This form indicates that you are paying someone in a foreign country for work reasons. And it is extremely important to prove your expenses. Your worker must also declare this income and pay taxes in their country of origin. If your worker does not submit this form, be sure to request it. Then keep it on file in your records in case you need it.
LLCs and S corporations use Form 1120S to track profits, losses, income, and other business expenses associated with their business. Payments to a foreign worker are deductible on Form 1120S, and you must include your foreign worker’s wages in the “Other deductions” category.
PLEASE NOTE: This is not financial advice. If you have more questions, consult your accountant.