Chiclanagir

I am putting this thread on for my daughter.

She is an author and publishes through Amazon.com. Due to the double taxation treaty she can get back her tax withheld by the IRS but needs to file a tax return. We have both looked at the form 1040 that they have sent her but it is double dutch as is the "help form". Is there anywhere we can get something to make it simpler to understand?

cranston

If you have all the details of her income and expenses try website www.taxact.com. You input the data and it will print out the forms.

Chiclanagir

She has the form but doesn´t know what goes where. I have sent them an email.

jeffreyhy

What form is "the form"?

Regards, JEff

nun

OK this is what to do to stop the US withholding tax from your US royalty income, basically you need to file a W-8BEN with Amazon.

http://timctaylor.wordpress.com/2012...eir-royalties/

and this should help too.

https://kdp.amazon.com/self-publishi...A1VDYJ32T5D3U4

Of course this income has to be included on your UK self assessment and UK tax paid.

Now to get a refund of US tax withheld I think the simplest approach is to use the US/UK tax treaty.
Under the US/UK tax treaty if your daughter is not a US citizen and is resident in the UK then the royalties are not taxable in the USA. So I think you can fill out the 1040NR and enter 0 on the royalties line and include an 8833 to claim exemption from tax on royalties under Article 12 of the US/UK tax treaty. Then include that tax that has been withheld in the payments section. This should leave you with a refund in the amount of the tax you paid.

Please double check this though. There is an office at the US embassy in London that can help you, they even answer the phone, but an in person trip might be better. This sounds like an issue they will have covered many times. You could also post your question over at

http://talk.uk-yankee.com/index.php?board=11.0

there are a number of experts on there.

Chiclanagir

It´s the 1040NR form and why would you put 0 on the royalties when you have received royalties. Sorry if I appear dense. She has tried phoning the London Embassy IRS but just gets a series of messages and no one to speak to.

nun

Because under the treaty the royalties are not US taxable income when paid to a UK resident who is not a US citizen. You must explain that on the 8833 form. You obviously have to pay UK tax on the royalties though.

Again please check my reasoning, I am not a professional and am just giving you my analysis of the situation. A professional or other geeky amateur over a http://uk-yankee.com may well be able to help you more.

Chiclanagir

8833 form????

Bluegrass Lass

http://www.irs.gov/uac/IRS-Accessible-PDF-Forms

Then look for the form.

nun

The 8833 is a form you use to claim a tax treaty position, you can get all the IRS forms on http://www.irs.gov or just by googling.

http://www.irs.gov/pub/irs-pdf/f8833.pdf

You will be relying on the US/UK Double Taxation Treaty Article 12 and will be overriding IRC 61:871(b) which is the 30% withholding tax on payments made to non-resident aliens. Specifically

ie US royalties owned by a UK resident (who is not a US citizen) are only taxable in the UK. So in your daughter's case she has no US taxable income.

cranston

The website has an easy to follow style that sorts out what goes where.

Either that or pay a US based accountant.

nun

I don't think taxact will be able to deal with treaty based returns.

nun

The OP's US tax return to claim the tax refund is actually very simple as long as the US/UK Tax Treaty is correctly applied. She has zero US taxable royalties and a few lines on the 1040NR and claiming of Article 12 should be enough. So I'd download a 1040NR and an 8833 and fill them out manually, no need for tax software. Double check with the tax office at the US Embassy in London. Also make sure you send Amazon a W-8BEN claiming the same Article 12 exclusion from withholding so that you don't have to file a 1040NR next year.

Steve_

What tax is being withheld, is it the NRA 30% tax? Yeah you just give Amazon (or whoever is doing the withholding) a W-8BEN and claim the UK tax treaty on it.

If tax has been withheld already and you want it refunded, file a 1040NR with a tax treaty based position on Form 8833.

Before going any further I suggest reading IRS publications 519 and 901.

No idea why they sent you a 1040, wrong form, there is no non-discrimination clause in the UK-US treaty (as far as I'm aware) so you can't use it.

This isn't really a tax help forum, I would suggest if you have further questions to (a) make an appointment with the IRS office at the US Embassy in London or (b) phone the non-resident tax IRS office at: 267-941-1000 (during business hours eastern time). Sometimes this number comes up as disconnected but it is connected, keep trying.

Steve_

I agree with nun, I wouldn't do either of those things, tax software is hopeless at 8833s unless you get one of the professional programs used by corporate accountants and a US-based accountant won't be that familiar with the situation unless you use KPMG or PWC who will charge a mint.

If you're going to use an accountant use a UK-based one who deals with US tax issues.

It's not really that hard frankly once you get familiar with it.