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Question

MY father is a retired Non resident alien living in the Netherlands. He only recives Social security income. This income is taxed at the 30%.
My dad has been faithlfully filing a 1040NR-EZ but never gets the refund he thinks he owes. He uses the tax tables from the booklet and I believe that is where he is wrong.

But, I cannot find anywhere that specifically states what return, if any, my father needs to file. The EZ form is not set up for showing his situation (i think) and the 1040NR is too complicated.

Does my father even need to file a return since ALL his taxes are taken at the Source?
Thank you

Submitted: 129 days and 14 hours ago.
Category: Tax
Value: $20
Status: CLOSED
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Posted by Merlo 129 days and 14 hours ago.

Answer

Hello XXXXXXX,

As long as your father's income tax withholding was satisfied by the source of the income, then he is not obligated to file a return.

Please refer to the following IRS instructions for non resident aliens under the paragraph entitled "Who Must File".

http://www.irs.gov/businesses/small/international/article/0,,id=96477,00.html

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you ron.


129 days and 14 hours ago.

Reply

Thank you for the answer.

 

My Father is "old school' and will probably not accept the idea of NOT needing to file a return.

 

If my Father chooses to file a return anyway, which form would you suggest and how would he fill it out?

Posted by Merlo 129 days and 14 hours ago.

Answer

Hello XXXXXXX,

If his only income is from SS, then I would suggest that he continue to use the 1040-EZ, as it is the simplest of the forms for him to file.

129 days and 14 hours ago.

Reply

Can you please tell me which lines he is to fill out on the form? Line 3 does not apply to Social security income and I do not know if line 16 applies.

 

I need to be able to explain to my Father exactly what to do. He has a SSA-1042S form which he can attach and use Line 18 for, but I do not know where to put his income from box 5 on the SSA-1042S form.

I appreciate your time.

Posted by Merlo 129 days and 13 hours ago.

Answer

Hello ron,

I apologize. I did not mean to tell you Form 1040nr-EZ.

He should be using the regular 1040NR form, but he does not need to fill out all of the schedules associated with that form.

His income from social security will be reported on line 82 of that form.

129 days and 13 hours ago.

Reply

that makes a difference.

 

The rule is that only 85% of the income is subject to the 30% tax. I'm trying to make line 82 work for that. I use column a, but where do I put the income? Do I use cloumn d? I then work through lines 85,86,87, and 88 and end up filling in lines 65 and 52.

 

I'm sorry to be a pain but I need to know exactly what to fill in.

 

Thank you,

Posted by Merlo 129 days and 13 hours ago.

Answer

No need to apologize. I am glad to help. Give me a few minutes to look over that form so I know the line numbers and I will get back to you shortly.

Posted by Merlo 129 days and 13 hours ago.

Answer

Hello again ron,

Sorry for the delay, but I had to look at the form so I could refer to the right line numbers.

On the form 1040NR, on line 82a your father should enter the amount of tax which was withheld from his benefits. They should have withheld 30% tax on 85% of his benefits only.

On line 82d he will enter 85% of his total SS income.

Then bring your totals down to lines 85 and 86.

On line 87d, figure the tax due on 85% of his benefits at 30% and enter that amount.

Line 88 should then be what he owes, and hopefully it will match what they took out of his checks. If they took out more, he would be due a refund. Whatever he owes then transfers over to line 52 of the form.

He then shows on line 58 what was withheld in tax. If they withheld more than what it shows he owes on line 52, he will receive a refund.

If this was helpful please press the Accept button.

Thank you ron.



Edited by Merlo on 7/15/2009 at 8:53 PM

129 days and 12 hours ago.

Reply

Thank you very much. It does seem a bit redundant if my Father chooses to file this return. The form seems so overkill.

 

There really is no place on the form where you show the Social Security Income. Is that true? The income area, lines 18 thru 23, are only for income connected with U.S trade.

 

Please confirm that question and I will stop bugging you and hit the accept button.

 

Thank you very much for your time.

 

Ron

Accepted Answer

Hello again Ron,

The only place on that form where you show the taxable part of the income is on line 82d. It does not show on the main part of the form.

It is a rather hard form to understand, I totally agree. But the income that your father receives is treated as income which is "not effectively connected" income, and that all gets reported in that secondary section.

Thank you Ron.

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Expert: Merlo
Pos. Feedback: 99.8 %
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Answered: 7/15/2009

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25+ years tax consulting. Specializing in returns for US citizens living abroad

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