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Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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I am a European citizen, living outside of the US working

Customer Question

I am a European citizen, living outside of the US working for an American company.
In 2015, I worked outside of the US, for the Latin american Market, but on a US payroll.
In 2015, I spent around 2,5 Months in the US.
I lived and worked in the US in 2014 on an OPT status and filled my taxes as a non resident Alien, given the 5 year exemption. I studied in the US from 2011-2013 on an F1 status
My company withhold income tax, and I am wondering if I actually have to pay 2015 taxes in the US. My understanding is that given my previous F1 status I am a non resident alien (NRA) for 5 years since I am exempt.
According to the IRS website, a NRA usually is subject to U.S. income tax only on U.S. source income. Additionally, the factor determining source for "Salaries, wages, and other compensation" is referred to as "Where services were performed".
Since services were performed outside of the US, do I pay taxes for the Entire year, the 2,5 months I spent in the US, or none at all?
Thank you
Submitted: 9 months ago.
Category: Tax
Expert:  Tax.appeal.168 replied 9 months ago.

Q: Since services were performed outside of the US, do I pay taxes for the Entire year, the 2,5 months I spent in the US, or none at all?

A: As taxes were withheld, even though you are not required to file a tax return for the year, you may want to in order to recoup some, or all the taxes that were withheld. In order to do this you will need to complete one of the w8 series form. You wrote your company. Are you referring to your own personal company, or the American company that you work for? Depending on which it is, will determine the W8 form that you will need to complete in order to reclaim, some or all of the taxes that was withheld.

Customer: replied 9 months ago.
Hi,thank you for your answer. I am Referring to the American company I work for. Also the company withold taxes on my wages, but not on the exercise of stock options.How should I proceed? How much should I recoup? The entire year?
Expert:  Tax.appeal.168 replied 9 months ago.

Q1: How should I proceed?

A1: File a tax return.

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Q2: How much should I recoup?

A2: As a NRA working outside the U.S., you should be able to recoup all of the withheld taxes providing that there is tax treaty between that country and the U.S. In order to recoup the taxes withheld, you will need to complete the Form W8-Ben and claim treaty benefits. What country are you a citizen of.

Q3: The entire year?

A3: Yes, the entire year. When you file a tax return, the tax return covers the full year, whether you earned income the full year or not.

Link to Form W8-Ben/instructions:

https://www.irs.gov/pub/irs-pdf/fw8ben.pdf

https://www.irs.gov/pub/irs-pdf/iw8ben.pdf