Guys, as a UK author claiming US tax withholding, I need some help completing the form W8-BEN, which I have to submit to Amazon.
The parts I am stuck on are:
Question 3: Type of Beneficial Owner? (I write books under my own name of Alan Toner)
Question 7 of 6: Foreign Tax ID No. (if any)? (Do I leave this blank, as I am a UK author?)
Question 8: Reference Number?
Part II, Section C: Am I a "Beneficial Owner or an "Individual"?
Question 10: Special Rates & Conditions
If any of you could help me with these questions, I really would be very grateful, as I can then get the form off to Amazon to stop the 30% Tax Withholding which they have been taking since last summer (by the way, can I claim all that money back? If so, how? Is it more long-winded than simply filling in a form like the W8-BEN?).
In the spring (before April 15) you can file US tax form 1040-NR (standing for Non Resident). Amazon will send you a form (1099) showing how much tax was withheld, and the 1040 allows you to reclaim that tax.
Thank you for informing me that I can reclaim all the tax that has has been withheld from me. I wasn't too sure whether I should bother reclaiming, as I have heard that there is a lot of red tape to this (e.g. having to send off your passport to the embassy etc.). But if the process is as simple as you suggest, then yes, I shall certainly reclaim.
To get the tax withheld back you need to file a nonresident tax return with the IRS. Use the form for nonresidents, (form 1040-NR). Make sure not to use form 1040, that one is for citizens and residents of the US.
The form covers one calendar year, so if you had withholding in 2012 you need to file a 2012 1040-NR. You can file that one right now even if the deadline has passed. If you do so you can get the 2012 tax back with interest. You probably received a 1042-S with details on how much you were paid and how much tax was withheld, use that information to fill out the tax return (use page 4 not page 1 to report the income)
Next year, you should receive a 2013 1042-S that you use to fill out the 2013 nonresident tax return to get back the tax withheld this year.
Now that Amazon stops withholding you can stop worrying about filing any more tax returns starting with 2014.
One question: Which number did you get to use in your W-8BEN? An ITIN or an EIN? If you got an EIN, you cannot use that number to file a tax return. You will need to get an ITIN for that. Unfortunately getting the ITIN involves whole the passport process.
If you already have an ITIN, then you are all set.
Hi Marcela. Thanks for your advice. Unfortunately, the number I was given was just an EIN number, so therefore reclaiming the tax already paid IS going to involve the red tape of sending off passport etc.
Yes, getting the ITIN is a little cumbersome (ok, more than a little) but it is the only way to file a tax return and get your taxes back.
A trip to the embassy is actually a lot better than what most people have to do, that is, mail their original passport to the IRS and hope that it doesn't get lost in the mail.
Only London, Paris, Frankfurt, and Beijing have IRS employees at the embassies who can provide this service. In any other place in the world you are out of luck.
Another thing you can try is to use the services of a Certifying Acceptance Agent or CAA ( http://www.irs.gov/Individuals/Acceptance-Agents--United-Kingdom ). These people have a contract with the IRS where they can review your documents, and certify to the IRS that they are valid. But they are not IRS employees or agents, they are independent individuals/businesses, so they will charge you a fee. How much? I have no idea. However they will help you avoid having to send your original documents, and if something goes wrong and your application is denied, they help you with that too (CAAs have a direct private line to the IRS ITIN unit)
I ask this because in Part II of the W8-BEN form, there is section headed "SPECIAL RATS AND CONDITIONS". I wasn't sure whether I needed to state a reason why I am claiming the 30% Withholding as a UK author. Do I have to fill this in, or just leave it blank?
Are you a UK taxpayer and do you fill in a self assessment form? If you do, you can avoid all of the hassle of reclaiming by setting off the tax paid against your tax return in the UK. It's what my accountant does for me.
I mentioned this on here before and was told it wasn't legitimate. It is, there is even an HMRC addendum form for the self assessment forms available for exactly that. Not part of the standard self assessment form, but you can get the 'foreign income' form from HMRC and attach it.