Bank stopped taking federal witholding from Savings account interest
#1
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Bank stopped taking federal witholding from Savings account interest
Dear all,
As I try and keep all my ducks lined up re: tax etc., I remember the bank asking me to fill a form (I am trying to find it as I type)..maybe a W8-BEN. I did not seem right but the bank told me it was the best form. Now, the (literally 8 cents) federal withholding has stopped.
I know I have an obligation to pay this tax, I am a resident for tax purposes and have my green card application pending. Should I call the bank and get them to take the tax again? Or can I just pay it when I file federal taxes for this year in 2017?
Thank you,
H
As I try and keep all my ducks lined up re: tax etc., I remember the bank asking me to fill a form (I am trying to find it as I type)..maybe a W8-BEN. I did not seem right but the bank told me it was the best form. Now, the (literally 8 cents) federal withholding has stopped.
I know I have an obligation to pay this tax, I am a resident for tax purposes and have my green card application pending. Should I call the bank and get them to take the tax again? Or can I just pay it when I file federal taxes for this year in 2017?
Thank you,
H
#2
Re: Bank stopped taking federal witholding from Savings account interest
I'll be anxious to read the replies. I have had many savings accounts over the last 68 years and never once had to complete a form and have federal taxes withheld from a bank savings account.
#3
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Re: Bank stopped taking federal witholding from Savings account interest
1) The bank were unsure of whether I was a non-resident or not, and took backup withholding..
2) Earlier in the year I told them that I do indeed pay tax like a US resident..
3) They stop backup withholding, leaving me to report the interest on form 1099-INT and pay the respective taxes when I file for this year (in 2017)?
That is what I believe has happened. They stopped taking backup withholding. I will call to check, but, at the end of the year will pay the few dollars (edit: tax) as required.
#4
Re: Bank stopped taking federal witholding from Savings account interest
What I've always done is report the yearly interest on my 1040 on the appropriate line and add the interest to my income and then calculated my taxes.
Now I'm only a middle class citizen who was a single mom and a small savings account so my interest was never all that much nor the money in the account more than 4 figures at any one time.
So please do not take what I did and will continue to do as something you can or should do. For all I know, you may come have to the US with a 6 figure savings account which puts you in a different scenario than myself.
Now I'm only a middle class citizen who was a single mom and a small savings account so my interest was never all that much nor the money in the account more than 4 figures at any one time.
So please do not take what I did and will continue to do as something you can or should do. For all I know, you may come have to the US with a 6 figure savings account which puts you in a different scenario than myself.
#5
Re: Bank stopped taking federal witholding from Savings account interest
Here is my understanding...
1) The bank were unsure of whether I was a non-resident or not, and took backup withholding..
2) Earlier in the year I told them that I do indeed pay tax like a US resident..
3) They stop backup withholding, leaving me to report the interest on form 1099-INT and pay the respective taxes when I file for this year (in 2017)?
That is what I believe has happened. They stopped taking backup withholding. I will call to check, but, at the end of the year will pay the few dollars (edit: tax) as required.
1) The bank were unsure of whether I was a non-resident or not, and took backup withholding..
2) Earlier in the year I told them that I do indeed pay tax like a US resident..
3) They stop backup withholding, leaving me to report the interest on form 1099-INT and pay the respective taxes when I file for this year (in 2017)?
That is what I believe has happened. They stopped taking backup withholding. I will call to check, but, at the end of the year will pay the few dollars (edit: tax) as required.
#6
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Posts: 1,170
Re: Bank stopped taking federal witholding from Savings account interest
What I've always done is report the yearly interest on my 1040 on the appropriate line and add the interest to my income and then calculated my taxes.
Now I'm only a middle class citizen who was a single mom and a small savings account so my interest was never all that much nor the money in the account more than 4 figures at any one time.
So please do not take what I did and will continue to do as something you can or should do. For all I know, you may have to the US with a 6 figure savings account.
Now I'm only a middle class citizen who was a single mom and a small savings account so my interest was never all that much nor the money in the account more than 4 figures at any one time.
So please do not take what I did and will continue to do as something you can or should do. For all I know, you may have to the US with a 6 figure savings account.
No no the account is not large, around the same as yours. I did have a meeting at the bank earlier in the year and they said the forms are standard if the bank is unsure of my tax obligations. I always punch in the 1099-INT numbers as requested and assume no additional tax was levied in the past since I had already paid the backup withholding..
Now, since I am no longer paying that backup withholding (28%), when I punch in the 1099-INT numbers next year the IRS will see that I owe tax and will take the (approx.. $2) appropriate amount from me.
This is how I understand the situation from the IRS website.. I get so lost in all this, I am a scientist, maths on the other hand confuses me to no end.
H
#7
Re: Bank stopped taking federal witholding from Savings account interest
Hi,
No no the account is not large, around the same as yours. I did have a meeting at the bank earlier in the year and they said the forms are standard if the bank is unsure of my tax obligations. I always punch in the 1099-INT numbers as requested and assume no additional tax was levied in the past since I had already paid the backup withholding..
Now, since I am no longer paying that backup withholding (28%), when I punch in the 1099-INT numbers next year the IRS will see that I owe tax and will take the (approx.. $2) appropriate amount from me.
This is how I understand the situation from the IRS website.. I get so lost in all this, I am a scientist, maths on the other hand confuses me to no end.
H
No no the account is not large, around the same as yours. I did have a meeting at the bank earlier in the year and they said the forms are standard if the bank is unsure of my tax obligations. I always punch in the 1099-INT numbers as requested and assume no additional tax was levied in the past since I had already paid the backup withholding..
Now, since I am no longer paying that backup withholding (28%), when I punch in the 1099-INT numbers next year the IRS will see that I owe tax and will take the (approx.. $2) appropriate amount from me.
This is how I understand the situation from the IRS website.. I get so lost in all this, I am a scientist, maths on the other hand confuses me to no end.
H
#8
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Re: Bank stopped taking federal witholding from Savings account interest
What do you mean by "punch in the 1099 numbers"? You will enter the amount shown on the 1099 sent to you by your bank in the new year on the appropriate line when you file your 2016 tax return, if that is what you mean. Then you will pay any taxes owing on your entire income for the year.
#9
Re: Bank stopped taking federal witholding from Savings account interest
Sorry, it was not meant to come across as flippant. My point was (along with my other US tax forms), my US income is relatively simple, being a case of entering the numbers as they appear exactly on each form. I am quite naïve when it comes to tax matters. This forum has proved very useful to me, I meant no disrespect.
#10
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Re: Bank stopped taking federal witholding from Savings account interest
I think I am all set, I can't believe it took over 5 years for myself and the bank to sit down and fill out the correct form. Hiring a CPA was also a great move on our part.
#11
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Re: Bank stopped taking federal witholding from Savings account interest
It sounds all fine. I remember filling in a similar form when we first opened our bank account and didn't yet have a SSN; the bank statement would show interest as X, then federal tax withholding as Y. Once we gave them the SSNs, they stopped making the withholding and just send over the 1099s for me to type the numbers into Turbotax where prompted.
#12
Re: Bank stopped taking federal witholding from Savings account interest
Under a certain amount you won't get a 1099.
#15
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Re: Bank stopped taking federal witholding from Savings account interest
If the withholding stopped, then you probably filled out a Form W-9 which is the correct form. You mentioned that you are a US resident for tax purposes. A US resident is not subject to backup withholding, which is why the withholding stopped when you filed a Form W-9.
You'll be issued a Form 1099-INT after the end of the year which will show the interest income you've earned. If the interest amount is less than $10, then a 1099-INT will likely not be issued to you. In that case, you'll have to go through your bank accounts to add up the total interest.
You should be fine!
You'll be issued a Form 1099-INT after the end of the year which will show the interest income you've earned. If the interest amount is less than $10, then a 1099-INT will likely not be issued to you. In that case, you'll have to go through your bank accounts to add up the total interest.
You should be fine!