As a US-based S-Corp, you can pay an independent contractor in Egypt by using a wire transfer or an international payment service. Here are some options to consider:
Wire transfer: You can wire the payment directly to the contractor's Citibank account. You'll need the contractor's bank account details, including the account number, routing number, and SWIFT code.
International payment service: You can use an international payment service like TransferWise, Payoneer, or PayPal to transfer funds to the contractor's Citibank account. These services offer competitive exchange rates and low fees.
Third-party payment service: You can use a third-party payment service like Guru.com or Upwork to pay the contractor. These services provide payment protection and escrow services, but they may charge higher fees than other options.
In terms of tax deductions, you should be able to deduct the $2,000 payment to the contractor as a business expense on your US tax return. However, you'll need to ensure that you have proper documentation, such as a contract or invoice, to support the payment and show that it was a legitimate business expense.
You may also need to file a Form 1099-MISC to report the payment to the contractor if the payment exceeds $600 in a tax year. The contractor will need to provide you with their US tax identification number (TIN) or a W-8BEN form to claim a tax treaty exemption if one is available.
Keep in mind that tax laws can be complex and vary based on the specific details of your situation. I recommend consulting with a tax professional or an accountant to ensure that you are meeting all tax reporting and payment requirements.