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Jonathan Tierney
Jonathan Tierney, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 307
Experience:  Tax Accountant at Praxair, Inc.
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We'd like to work with an Australian consultant. She doesn't

Customer Question

We'd like to work with an Australian consultant. She doesn't have an H1B visa and says that she would be reporting her income on her Australian tax return. Do we need a W-8ben? She's concerned that she'll end up getting double taxed with a W-8ben. I don't think we can use a W-9, can we?
Submitted: 1 year ago.
Category: Tax
Expert:  Jonathan Tierney replied 1 year ago.

Hi, my name is ***** ***** my goal here is to provide you with the most complete and accurate answer possible.

In order to use a W-9, she would need to provide you with a Social Security or employer identification number. You did not mention whether she will be doing her consulting work while still in Australia or will she be coming to the United States? If she is working from Australia, you could use a W-8ben and her income would not be taxable in the United States. However, if she does do work while in the United States, she is subject to US income tax on her US-source income. Instead she could provide you with a W-8ECI which would subject her compensation to withholding at a flat 30% tax rate. As a nonresident alien, she has no obligation to file a US tax return, but she can choose to file a Form 1040NR and claim a refund of some of the withholding. Alternately, she could use Form 8233 to claim exemption form withholding. You can look up if there are any provisions in the US-Australia tax treaty here: http://goo.gl/zon6cX.

As an additional service, I can read through the tax treaty and technical explanation to see if there are any provisions that may apply to your situation.

I hope this answers your question. Let me know if I can clarify anything or answer any additional questions. Jonathan

I believe Australia would either not tax her income sourced to the US at all or