Cross-border founders live this: sales in USD, a supplier in EUR, a bank in GBP. Here's how to keep it clean.
What multi-currency actually does
- Records each transaction in its original currency, then translates to your base currency at the right rate
- Tracks realized and unrealized FX gains/losses automatically as rates move
- Reports everything in one base currency so you can actually read your P&L
The decisions that matter
- Base currency — usually where you file taxes; changing it later is painful, so set it deliberately at setup
- Rate source — Xero pulls daily rates; for tax you may need specific period rates, which we handle at close
- FX gain/loss treatment — these hit your taxable income; they're not just cosmetic
Where it ties into tax
For non-resident-owned US entities, currency movement interacts with Form 5472 transaction reporting. Clean multi-currency books make that filing straightforward instead of a reconstruction project.
Selling across currencies?
We set up Xero multi-currency correctly and reconcile the FX so your tax return is painless.
See Xero Accounting Get a free quoteIf your business pays US contractors, three obligations follow you all year.
1. Collect a W-9 before you pay
Get a signed W-9 from every US contractor before the first payment. It gives you their legal name and TIN — the two things you need at filing time. Chasing W-9s in January from contractors who've moved on is how deadlines get missed.
2. Issue 1099-NEC on time
You report nonemployee compensation on Form 1099-NEC once payments to a contractor cross the reporting threshold for the year (historically $600; recent legislation raises it for payments made after 2025 — check the current figure when you file). The form goes to the contractor and the IRS by January 31.
- Payments to corporations are generally exempt (attorneys excepted)
- Payments made by credit card or through platforms like PayPal business are reported by the processor on 1099-K instead — don't double-report
- Foreign contractors working outside the US get a W-8BEN, not a 1099
3. Make sure they're actually contractors
The IRS looks at behavioral control, financial control and the relationship. Set their hours, provide the tools, make them exclusive — and you may have an employee, with back payroll taxes and penalties to match. When in doubt, run the facts past a professional before the relationship hardens.
The bottom line
W-9 up front, 1099-NEC by January 31, and honest classification. MOREOFTAX handles contractor reporting, payroll setup and classification reviews as part of bookkeeping and tax plans.
Contractor reporting handled for you
W-9 collection, January 1099 filings and classification checks — bundled into our bookkeeping plans.
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