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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12477
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I live in Malaysia and I have income from stocks in USA. I

Customer Question

I live in Malaysia and I have income from stocks in USA. I guess I did not fill W8-ETB form so they deducted extra tax. To whom should I submit this form so that they can refund tax income.
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

Hi, so sorry, it's too late to submit the W8 to the withholding agent (the brokerage firm) ... That withholding (essentially a pre-payment of any actual tax owed) has already been submitted to IRS.

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What you'll need to do at this point is file a 1040NR "U.S. Nonresident Alien Income Tax Return," to get a refund if the tax amount that is actually owed is less than what was withheld and paid in.

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Expert:  Lane replied 1 year ago.

What you will find when you file is that If you were in the United States for less than 183 days during the tax year, capital gains (other than gains listed earlier) are tax-exempt for non-resident aliens

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Here are the W8 series of forms given to withholding agents (which again, if the withholding is already done, will not help at this point).

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  • Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding
  • Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)
  • Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States
  • Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding
  • Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding

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And here's the 1040NR, which will generate a refund if this was for capital gains (the sale of shares). Now, if the income is from dividends, there IS 30% flat-rate tax on dividends, including interest-related dividends, (unless there is a reduced rate for a tax treaty, but the US has no tax treaty with Malaysia) As of 2010, all mutual-fund distributions are considered dividends

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https://www.irs.gov/pub/irs-pdf/f1040nr.pdf

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Expert:  Lane replied 1 year ago.

Please let me know if you have any questions at all.

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If this HAS helped, I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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That's the only way I'll be credited for the work here.

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Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, retirement plan, Social Security & Medicare, estate, corporate & tax advice since 1986