Foreign tax paid on T3 slip - US tax withheld?
Moderator: Mark T Serbinski CA CPA
Foreign tax paid on T3 slip - US tax withheld?
I've got a client (US citizen) with over $1,000 US tax withheld per his T3 slip. Can this be included as "Federal income tax withheld" on his US 1040?
In addition to. I'm only asking the question.
In fact, if the taxpayer supplies proper identification as a US person, (on a W-9), the firm should stop withholding IRS tax altogether. This would give him a better return on his investment as none would be coming out for taxes (that are likely to be refunded anyways).
Us citizens pay tax on investments on thier 1040, not typically by having tax withheld. That is for non-residents.
A US citizen should ALWAYS identify himself as such when dealing with any broker, for this reason, and others.
In fact, if the taxpayer supplies proper identification as a US person, (on a W-9), the firm should stop withholding IRS tax altogether. This would give him a better return on his investment as none would be coming out for taxes (that are likely to be refunded anyways).
Us citizens pay tax on investments on thier 1040, not typically by having tax withheld. That is for non-residents.
A US citizen should ALWAYS identify himself as such when dealing with any broker, for this reason, and others.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
I haven't seen K-1's for any of my clients, except those that belong to partnerships in the US. I think the K-1's are only for partnerships and such.
Regardless, I think you're absolutely correct with respect to the withholding. As a US citizen, he really shouldn't have US withholding on those dividends. I'll contact the client's broker and inquire. I know that they (at the local office level) know that he's a US citizen, but it certainly appears that they may not have this recorded properly with his investments.
Thanks,
Rob
Regardless, I think you're absolutely correct with respect to the withholding. As a US citizen, he really shouldn't have US withholding on those dividends. I'll contact the client's broker and inquire. I know that they (at the local office level) know that he's a US citizen, but it certainly appears that they may not have this recorded properly with his investments.
Thanks,
Rob