How do tax treaties work for foreign contractors with US companies? Form 1099 and 1040NR filing questions

You're right to be thinking about this now rather than at tax time! As a foreign contractor receiving income from US sources, you'll need to understand both the tax treaty and the filing requirements. First, you'll need to file Form 1040NR as a nonresident alien receiving US-source income. The US-Argentina tax treaty likely has provisions to prevent double taxation, but you'll need to specifically claim treaty benefits on your tax return. To claim treaty benefits, you'll need to complete Form 8833 (Treaty-Based Return Position Disclosure) along with your 1040NR. This form is where you'll explain which specific treaty provision you're using to reduce or eliminate US tax on your income. You don't necessarily need to file your Argentine taxes first, but you will need to report your US-source income in Argentina according to Argentine tax laws. The treaty typically determines which country has primary taxing rights for each type of income.

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One important thing nobody mentioned yet - if your income is "personal services" income (which contracting usually is), you need to be careful about "183 days" rules in most tax treaties. Many treaties only allow exemption if you spend less than 183 days in the US during the year. Also, keep records of WHERE you physically performed the work. That matters a lot for treaty qualification. If you visited the US client even briefly and did work there, that portion might be fully taxable regardless of the treaty.

Make sure you check if your US company needs to have you fill out Form W-8BEN to certify your foreign status. Many US companies require this form before they'll honor the tax treaty provisions. Without it, some will withhold 30% automatically regardless of the treaty.

As someone who's been through this exact situation as a contractor from Mexico working with US companies, I wanted to add a few practical tips that really helped me: 1. **Get organized early** - Create a folder system now for all your tax documents. You'll need your 1099, contract agreements, proof of Argentine residency, and records of any US visits. 2. **Consider quarterly estimated payments** - Even though your company isn't withholding taxes, you might still owe US taxes depending on how the treaty applies to your specific situation. Making quarterly payments can help avoid underpayment penalties. 3. **Document your work location meticulously** - I keep a simple spreadsheet tracking where I physically perform work each day. This becomes crucial evidence if the IRS ever questions your treaty position. 4. **Connect with other Argentine contractors** - There are some good expat tax groups on Facebook where people share their experiences with the US-Argentina treaty specifically. The nuances can be quite different from other countries' treaties. The learning curve is steep but totally manageable once you get the system down. Feel free to ask if you have specific questions about the filing process!