How to Document International Payments to Contractors Without Violating IRS Rules?

Technical Wednesday. Hello, I’m CPA Maximiliano Mira Salas. In this new edition of our weekly newsletter, we address a recurring issue in international operating structures —especially those used by Latin American companies or freelancers in the U.S.—: the outsourcing of professionals or services abroad. While this is a common practice, it’s important to remember that payments made to international contractors are subject to a specific regime of documentation, withholding, and reporting to the IRS. Lack of awareness or informality in these relationships may result in the loss of tax deductibility, penalties for failure to file informational forms, and even reclassifications by the tax authorities. 🧾 IRS Technical Criteria for Payments to Foreign Contractors ⚠️ Common Mistakes Leading to Tax Risks 📌 Legal and Accounting Disclaimer This communication is for informational purposes only and does not constitute legal or tax advice. Each case must be evaluated individually, considering the taxpayer’s country of residence, global income, and applicable international treaties. At FINANCERS, we work with internationally operating structures. We assist Latin American companies, professionals, and investors hiring collaborators abroad through U.S.-based structures, ensuring compliance with IRS requirements. If you have pending payments to foreign contractors or are unsure whether you must report them, you can schedule a technical review with our team. CPA Maximiliano Mira SalasInternational Tax Advisor | FINANCERS 🇦🇷🇺🇸

Common Technical Errors in Monthly Bookkeeping for U.S. Structures

Technical Wednesday. Hello, I’m CPA Maximiliano Mira Salas. In this edition of our weekly newsletter, we address critical aspects of monthly bookkeeping—a key component for accounting and tax compliance in corporate structures used by Latin American companies, professionals, and investors in the U.S. Poorly organized—or incomplete—accounting not only undermines the quality of financial information but can also expose the entity to penalties, tax reclassifications, or the loss of tax benefits. ⚠️ Key Inconsistencies Detected in Practice Mixing personal and corporate accounts: Lack of clear separation between personal and business transactions compromises the integrity of financial statements and may violate the principle of independent legal entity.Recommendation: Maintain strict separation of assets and record only transactions directly linked to the LLC’s business activity. Underreporting income and mismatches with information returns: Omitting income received through platforms like Stripe, Zelle, or alternative payment gateways creates discrepancies with Form 1099-K and increases the risk of IRS audits.Recommendation: Implement a monthly reconciliation process between accounting records, bank statements, and third-party reports. Improper classification of operating vs. capital expenses: Recording capital outlays (e.g., equipment) as operating expenses leads to errors in depreciation, distorts net income, and affects tax filings.Recommendation: Apply capitalization and amortization criteria under U.S. GAAP and identify assets subject to Section 179 or MACRS treatment. Failure to record systematic depreciation: Not recognizing periodic depreciation undermines the reliability of operating results and the tax base.Recommendation: Keep an updated fixed asset register and calculate monthly depreciation under the applicable method. Lack of monthly bank-account reconciliation: Failing to reconcile books with bank statements prevents the detection of errors, omitted income, or unrecorded expenses.Recommendation: Perform monthly reconciliations—automatic or semi-automatic—covering payment gateways and clearing accounts. Incorrect recording of capital contributions or intercompany loans: Entering member contributions or intra-group loans as ordinary income causes accounting and tax errors.Recommendation: Document every fund transfer with resolutions, contracts, or formal agreements, and record it correctly under equity accounts. 🧾 Technical and Tax Implications Entities must maintain accounting consistent with their declared tax regime (e.g., disregarded entity, partnership, or corporation). Errors in accounting records directly impact filings such as Forms 1065, 1120, 5472, Schedule L, or M-1. Lack of proper bookkeeping weakens the argument for effective tax residency and may result in reclassifications or deemed assessments. 📌 Legal and Accounting Disclaimer This communication is for informational purposes only and does not constitute legal or tax advice. Each case should be evaluated individually, considering the taxpayer’s country of residence, global assets, and applicable international treaties. At FINANCERS, we provide comprehensive accounting services tailored to the reality of Latin American entrepreneurs, freelancers, and companies with operations in the U.S.—from chart of accounts implementation to monthly reconciliations and tax reporting. Our approach ensures accurate books, facilitates tax return preparation, and reduces risks associated with accumulated accounting errors. CPA Maximiliano Mira SalasInternational Tax Advisor | FINANCERS 🇦🇷🇺🇸

Is Your Company Compliant with International Payroll Tax Requirements?

Technical Wednesday. Hi, I’m Maximiliano Mira Salas. Today, we address a key (and often underestimated) aspect of international operations: the technical management of Payroll across multiple jurisdictions. As businesses and corporate structures expand globally, accounting and tax systems must evolve with the same level of precision. Within that framework, international payroll management becomes a critical—and often overlooked—challenge. Global Payroll is more than calculating salaries. It requires a deep understanding of the tax, social security, contractual, and documentation requirements in each country involved. A single mistake can lead to labor penalties, retroactive tax adjustments, non-compliance with international treaties, and in severe cases, operational disqualification of the entity. 🧾 Key Technical Aspects of International Payroll Management. 🌍 Why Does Your Company Need a Technical Global Payroll Framework? 📌 Legal and Accounting Disclaimer. This communication is for informational purposes only and does not constitute legal or tax advice. Each case should be evaluated individually, taking into account the taxpayer’s country of residence, global asset base, and applicable international treaties. At FINANCERS, we provide tailored solutions for the efficient management of global payroll. Our team coordinates accounting, tax, and legal aspects, ensuring full technical compliance across jurisdictions and minimizing operational risks. CPA Maximiliano Mira SalasInternational Tax Advisor | FINANCERS 🇦🇷🇺🇸

LLC: A Powerful Tool to Protect Your Investments

Investment Protection with an LLC: What You Need to Know An LLC (Limited Liability Company) can help protect your investments, but there is an important detail: it will only be effective if it is a multi-member LLC, not a single-member LLC. An LLC is not a catch-all solution. It will not protect you from inheritance tax. Whether you invest personally or through an LLC, the regulator will treat it the same way. In the event of death, assets exceeding USD 60,000 will be subject to an inheritance tax that can range between 40% and 70%. Although you might try to withdraw funds before the tax authority detects it, the taxable event will have already occurred. That’s why it is crucial to consult a lawyer to explore your options. The Solution: An Offshore Company One way to protect your assets is to set up another foreign company as the owner of your LLC, known as an offshore company. This strategy has an initial cost of approximately USD 2,000 and an annual maintenance fee of around USD 1,500. It may seem costly, but it represents a valuable solution to safeguard your wealth. Cash Flow vs. Asset Stock? From the start, I’ve mentioned the difference between cash flow and stock. An LLC is excellent for managing the cash flow of funds, which is positive. But it will not provide coverage for the stock — that is, the assets you already own. Whether held personally or through an LLC, you remain exposed to inheritance tax in the event of the owner’s death.

Corporate Bank Account Opening at CITI – Beta Stage

At FINANCERS, we are launching a special promotion for corporate bank account openings at CITI for LLCs and Corporations, valid until October 31 or until stock runs out. This exclusive offer is aimed at 25 companies wishing to participate in our Beta phase. Service Details:• Opening fee: USD 1,500 (10% discount for current Financers clients).• Initial funding requirement: USD 25,000.• Address: You can use a Registered Agent in the states of Florida, Delaware, Wyoming, or New Mexico. Benefits:• Access to operational accounts with Zelle.• Full support throughout the account opening process. Conditions:• The promotion is valid until October 31 or until stock runs out.• This is a Beta stage, so we cannot guarantee account permanence, although we will work to make the experience as smooth as possible. For more details or to proceed with the opening, please contact our FINANCERS sales team. We are available to answer any questions and help you take advantage of this opportunity.

Mandatory Forms to Comply with the IRS in the U.S.

Technical Wednesday. Tax season brings a series of requirements you can’t overlook if you have an LLC in the U.S. or receive income from abroad. Here are the most relevant ones:• FinCEN BOI: Beneficial Ownership Information report for the LLC. It is essential to keep your LLC compliant with federal regulations.• Form 1065: If your company is a partnership, this form is essential to report income.• Form 1040NR: For non-resident foreigners who earned income in the U.S.• Form 5472: Mandatory for single-member foreign-owned LLCs to report transactions with related parties.• Form W-8BEN: Certifies your non-resident status and allows reducing withholding taxes under international treaties. Practical Example: The W-8BEN Form. Imagine you are a freelancer in Argentina providing services to a U.S. LLC. The company requests the W-8BEN form to certify that you are not a U.S. resident. Why is this important? Because if you don’t submit it, the U.S. company could withhold up to 30% of your income as taxes. With the W-8BEN, you declare that you do not reside in the U.S. and can benefit from tax treaties that reduce this withholding, improving your cash flow and avoiding issues with the IRS. Key Dates for Tax Season. Failure to comply with these dates can result in significant penalties. Here are the deadlines you must keep in mind:• January 31: Deadline to submit Form 1099-NEC if you paid contractors.• March 15: Due date for partnership returns (Form 1065) and S Corporations (Form 1120S).• April 15: Deadline for individual returns (Form 1040) and C Corporations (Form 1120). If you need more time, you can request an extension until October 15, but keep in mind that any balance owed must be paid by April 15 to avoid fines and interest. At FINANCERS, we take care of everything so you can focus on what matters most: your business. Don’t let forms and regulations keep you awake at night. Contact us for a free consultation and get all your questions answered by our expert team.

Payroll Management for Foreign Companies in the U.S.

Technical Wednesday. Hello, I’m Cr. Maximiliano Mira Salas, and today I want to share the key points for managing payroll in the U.S., which can be complex for foreign companies starting operations in this country. If you want to avoid common mistakes, ensure legal compliance, and optimize your accounting processes, this topic is essential for you! 💡 A common mistake: Many foreign companies assume that the regulations of their home countries also apply in the U.S., which is not the case. Adapting internal processes and having proper advisory is key to avoiding future problems. Proper payroll management not only guarantees legal compliance but also provides financial clarity and peace of mind to focus resources on business growth. As international accounting experts, at Financers we help many companies overcome these challenges. 👉🏼 If this resonates with you or you know someone who needs it, go tell your friends and work peacefully! Cr. Maximiliano Mira SalasInternational Tax Advisor | FINANCERS

What Are the ITIN and EIN and Why Do You Need Them to Operate in the U.S.?

Technical Wednesday. Hello, I’m Cr. Maximiliano Mira Salas, and this Technical Wednesday I want to tell you something fundamental if you are a freelancer, entrepreneur, or investor operating with the United States. What is the ITIN? ✔️ It is the Individual Taxpayer Identification Number. Issued by the IRS for those who do not qualify for an SSN but have tax obligations in the U.S. 💡 Who needs it?• Foreigners with income in the U.S.• Partners in international companies.• Investors seeking to benefit from tax treaties. 👉 Example: If you provide services to a company in the U.S., you need an ITIN to correctly file your taxes and avoid penalties. What is the EIN? ✔️ It is the Employer Identification Number, necessary for any business that wants to operate formally in the U.S. 💡 What is it used for?• Opening business bank accounts.• Filing company taxes.• Complying with IRS requirements. 👉 Key fact: If you are a foreigner, you must request it with Form SS-4 and send it to the IRS. The process can take a few business days. 🚨 Why is it important? Without an ITIN or EIN, you cannot operate legally, and you could lose up to 30% of your income due to unnecessary tax withholdings. 📊 Practical example:If you work as a freelancer and do not file Form W-8BEN, the IRS may automatically withhold 30% from you. Avoid this with the right strategy! At Financers, we take care of everything for you: ✅ Obtaining ITIN and EIN.✅ Complete tax filings.✅ Tax optimization for international businesses. Work peacefully and focus on your business.If you relate to this or know someone who needs it, share this post.

Attention all LLC partners in the United States!

Technical Wednesday. If you have an LLC in the United States, it’s time to file your tax return. At FINANCERS, we are ready to support you throughout this process and ensure you meet your tax obligations efficiently, paying only what is fair. 💡 Access the form here ☑️ How to get started?Complete the form at the link provided and follow these steps:1️⃣ Enter your company’s basic information, such as name, phone, and contact email.2️⃣ Indicate if you have completed the form before:• Yes: We will work with the previous information to make the process easier.• No: We will request important data like your registered agent’s address and bank statements.3️⃣ The form will guide you step by step automatically. Just follow the instructions to complete it easily. 🗓️ Important deadlines:✅ March 15: For Multi-Member LLC (Form 1065).✅ April 15: For Single-Member LLC or Sole Proprietorship (Form 1040 with Schedule C). ❓ Frequently asked questions:💬 Are you a U.S. citizen? If you are Argentine, mark “No.” Only mark “Yes” if you have U.S. citizenship.💬 What if I don’t have an SSN or ITIN? Leave that field blank unless the form marks it as mandatory with an asterisk.💬 What should I put in the TAX ID? Enter your CUIT (Argentina). If they ask for EIN, provide the one assigned to your company.💬 Which bank statements should I upload? Include all your account statements from January through December 2024, either monthly or in an annual document.💬 Should I include savings or broker accounts? Yes, add statements from savings accounts and investments in platforms like Interactive Brokers, Schwab, or Ameritrade. 🚀 Don’t leave this to the last minute!Complete the form today and let’s work together so your tax return is a success. At FINANCERS, we make this process simple and effective.

Should You Change the Tax Classification of Your LLC with Form 8832?

Technical Wednesday Hi, I’m CPA Maximiliano Mira Salas. In this edition, we explore one of the most important—and often misunderstood—forms for those operating entities in the U.S.: Form 8832, used to make what’s called an Entity Classification Election. This election allows a business to define how it will be taxed by the IRS: as a corporation, a partnership, or a disregarded entity. At FINANCERS, we assist clients in filing this election correctly, as it has a direct impact on tax burden, filing obligations, and international accounting strategies. 🔍 What is Form 8832 and when should it be filed? Form 8832 is used by an entity—such as an LLC—to elect a tax classification different from its default under IRS rules. This is commonly known as the «check-the-box election.» By default: Form 8832 allows, for example, an LLC to elect to be taxed as a C-Corporation. This election is particularly useful for estate planning, attracting outside investment, or structuring international tax deferral strategies. ⚙️ Accounting and Legal Implications of the Election 💼 Common Scenarios 📅 Key Deadlines and Validity of the Election ⚠️ Common Mistakes to Avoid ⚖️ Legal and Accounting Disclaimer This communication is for informational purposes only and does not constitute legal or tax advice. Each case should be evaluated individually, considering the taxpayer’s residence country, global estate, and applicable tax treaties. The filing and implications of Form 8832 must be reviewed by a professional with experience in U.S. tax law. At FINANCERS, we provide both technical and operational analysis to determine whether a tax election is advisable, prepare Form 8832, and assess the accounting, estate, and regulatory impact across your international structure. CPA Maximiliano Mira SalasInternational Tax Advisor | FINANCERS