what form should a non resident employee file to avoid tax from it US employer?

Question

The US employer asked my father to fill a W-9 form in
order to pay him for services provided to them in South America where my father resides permanently. I've told my father that a W-9 is for
US residents, not for foreigners. And that he should
provide them with a W-8 form instead. Am I correct?
Or is there another form he should provide to avoid unnecessary US income tax witholding ?

Answer 1

Assuming that your father is NOT a US citizen or legal resident he is NOT subject to US taxation on any of this income. He does not have a SSN and cannot be required to get an ITIN (and isn't eligible for either anyway) so he does NOT need to provide any form or number to the payer of the funds. If they insist on a W-9 he could fill one out and write "Non-Resident Alien" where the SSN would go. That should satisfy the payer.

The W8-BEN and 8233 are for individuals temporarily in the US who are claiming tax treaty exemption from withholding or tax treaty reductions of tax liability or other tax treaty treatment of their tax situation. They are not used by a non-resident alien working outside of the US for a US employer.

Answer 2

Though I am not 100 per cent sure, but since your father provided services from South America for a U.S. employer, the employer should not hold any taxes or get any Form from your father.

Thousands of individuals and companies in the Asian countries provide services to the U.S. companies and all of them get full payment without any withholding. May be, this is a special case for South America.

Contact the U.S. employer again and tell them to recheck if they are required to withhold taxes. At least, your father does not need U.S. taxpayer Identification Number (Form W9). He can't file the U.S. return.

Answer 3

it is not appropriate while you're single or married, as a 1099, self sufficient contractor, you will pay your self employment tax, it fairly is approx. 15.3% of your sch C 'internet' you document any and all earnings on sch C, you're allowed some expenditures to reach at a internet determine which you pass to a Sch SE and calculate you se taxes those are due and payable whether you are able to desire to not have any certainly earnings taxes to pay one million/2 of the SE tax is a credit to chop back your gross and you extra decrease that by skill of your very own exemptions and commonly happening or itemized deductions considering the fact that self employment is earned earnings you are able to nicely be eligible for EIC, which in the top would pay your se tax for you

Answer 4

If your father is a US citizen, he is subject to US income tax on his worldwide income (subject to foreign exclusion and foreign tax credits) so Form W-9 for him to provide his social security number is appropriate. If he is not a US citizen, his income is not US source income and would be subject to income tax, if any, of the country where he lives.

Answer 5

W-8BEN and or 8233
Here's a description & links to the forms:
http://www.irs.gov/businesses/small/international/article/0,,id=96438,00.html