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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 3375
Experience:  Over 20 Years experience
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Hello, I am in USA on a G4 visa (non resident alien). I

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Hello,

I am in USA on a G4 visa (non resident alien). I am not taxed on my income from UN. But I am not quite sure what I am supposed to do re my US brokerage accounts. I understand, I have to submit a W-8BEN form first. Upon submission, will brokers continue to withhold anything (currently they all act differently - some withhold on dividends, some on full amount of proceeds or do nothing)? What is my overall tax liability re investment income - am I taxable on capital gains, dividends? if yes, should I submit a tax return once per year by 15th Apr? Could you recommend a tax firm specialized on non residents for tax return preparation? Thanks, Elena

R. Klein, EA :

Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.

R. Klein, EA :

Hi Elena

R. Klein, EA :

If you are working for the UN, then yes, your income is not taxable to the US from that activity, but your investment income is

R. Klein, EA :

They brokerage will withhold 30% of your dividend and interest income without that W8-BEN

R. Klein, EA :

You will need to file a US Non-Resident return only if your income is over $600, I believe is the amount, OR if there are taxes withheld from your investment income.

R. Klein, EA :

The IRS Form 1040-NR would be due April 15 after the end of the tax year.

R. Klein, EA :

US Tax rates start as low as 10%, but go up to about 35% when income is sufficiently high.

Customer:

Thanks, XXXXX XXXXX already submitted W-8BEN to some brokers and is in the process of submitting the rest. Assuming they all accepted w-8BEN from me, I understand they are going to return the withheld amounts and then I am liable to report my investment income myself, right?

R. Klein, EA :

Looks like the minimum income that is not taxed starts at $3900 if you are single.

R. Klein, EA :

Yes, if any amounts have been withheld you will need to file a return to get a refund.

Customer:

I am married and we are both on G4visa. My estimation that the investment income will be higher than $3900.

Customer:

And as far as I understand from a tel. conversation with one of the brokers, they are going to return the withheld amount of taxes directly to my brokerage account.

R. Klein, EA :

There is a $3900 exemption for each person on your tax return. Husband+Wife + one dependent means an exemption of $3900 x 3 = 11700 exempt income.

R. Klein, EA :

In 2013, this will probably be $4000 per person

Customer:

I see. Assuming it is $4k per person, unless our investment income (cap.gains + div., right?) is less than $12K, we could not file a return or we have to file a return anyway, but no tax liability?

Customer:

I meant we could skip filing a return?

R. Klein, EA :

If it was less than the exemption and you had no tax withheld then you do not need to file.

R. Klein, EA :

If EITHER is true--you had tax withheld OR you had more income than exemptions---you would need to file a tax return.

Customer:

Is investment income is a sum of capital gains (or losses) plus dividends paid?

R. Klein, EA :

OR if your income fell under a treaty with another country, then also no tax return due.

R. Klein, EA :

Investment income includes capital gains, dividends and interest income.

Customer:

Thanks

R. Klein, EA :

I hope I have answered your tax questions today, Elena.

R. Klein, EA and 3 other Tax Specialists are ready to help you