How Form 1099-K Affects Americans With Overseas Businesses

If you are living outside the U.S. and using a foreign address on your credit-card and electronic payment accounts, you will probably not be issued the new 1099-K tax form, says Barbara Weltman, a New York-based tax attorney and author of J.K. Lasser’s Small Business Taxes 2012. In the instructions governing 1099-K reporting, the IRS specifically exempts payment processors from having to report transactions made to payees with foreign addresses. (I took a look at what the new rule means for businesses in the U.S. in a previous column.)

Of course, if your accounts are set up under a U.S. address, you will get the form. And either way, if you are a U.S. citizen you must file a Form 1040 and pay federal taxes on your income, regardless of where it comes from, says Wonsun Willey, a tax partner in the Morgan Hill (Calif.) office of CPA firm Sensiba San Filippo. Depending on whether you own property or have business interests in specific states, you may also be required to file state tax forms, Willey says.

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