According to law, you must annually report your withheld taxes on certain income of foreign vendors or foreign non-employees to the Internal Revenue Service. You can fulfill this requirement by using the system report 1042S Reporting. This report enables you to print out withholding tax data on official preprinted 1042S forms, or generate a file to be submitted electronically (which is mandatory for 250 or more vendors).
You can also use the Generic Withholding Tax Reporting program to prepare your 1042S file or form.
In the US, companies are usually required to withhold income taxes by deducting a portion, approximately 31%, of the payment to the vendor. You pay the withheld portion to the IRS. If there are any differences between actual taxes due and taxes withheld, then the IRS contacts the 1042 vendor directly for an adjustment.
You can submit Form 1042S to the IRS in the following formats:
· Preprinted forms, using SAPscript form F_RFKQSU40_10
· Data file
To access the report, from the SAP Easy Access menu, choose Accounting ® Financial Accounting ® Accounts Payable ® Withholding Tax ® USA ® 1042S Reporting.
The values for your company's name, address, and taxpayer identification number are derived from the company code's global parameters.
The default values in the 1042S report for the vendor's name, address, and taxpayer identification number come from the vendor master record.
Report documentation for RFKQSU40