This blog was last updated on June 27, 2021
The March 15th deadline for form 1042-S has come and gone, but the memories of 1042-S challenges feel like they will last forever. However, the reality is they don’t last forever. As process owners begin preparing for their tax season review to internal stakeholders, most are left trying to recollect their notes and determine how to present them well enough to drive improvements to the process for next year. The truth is 1042-S is similar to all other tax information reporting forms. There is a critical need to collect accurate information and continually monitor regulatory changes throughout the year at both a federal and state level, gather and process the data onto compliant forms that can change weeks before their deadlines, and report all of this information to the appropriate parties as is expected by your customers (reflected in customer service satisfaction) and the IRS (potentially resulting in penalties). Managing Form Changes Example: Form 1042-S, Foreign Person’s U.S. Source Income While 17 boxes remained unchanged between the 2014 and 2015 editions of Form 1042-S, there were 32 changes to the form itself. This is not including the over 40 changes that were made to the Form 1042-S instructions during that same time period. From tax year 2013 to 2014, all but FOUR boxes changed according to my count: Box 1: Income Code, Box 2: Gross Income, Box 7: Federal Tax Withheld, and Box 8: Withholding by other agents (2013)/ Tax withheld by other agents (2014) We will continue to provide educational material you can leverage for your internal season reviews. Hopefully, this will give you a head start on preparing.
