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W8-ben instructions Form: What You Should Know

The same rules that apply to the U.S. citizen resident with the same country of residence under U.S. tax law apply to a dual citizen resident of another country under another tax law (even if the resident does not have citizenship with the other country).4. Part II — U.S. Taxable Income:5. Indicate the amount of U.S. source income on Form W-8BEN you’ve included on your Form 1040, U.S. Individual Income Tax Return, and Form 1040NR, Nonresident Alien Income Tax Return. The amount of tax withheld and the amount of U.S. source income you include on Form W-8BEN does not count as an itemized deduction for U.S. income tax purposes. If you are not sure whether you will be taxed at a higher rate based on income from sources within the United States or with foreign income, contact a tax professional.6. Part III — Total Taxable Income: The total of your foreign source taxes withheld and the foreign source income paid or accrued does not include the withholding allowances shown on Form 1040, U.S. Individual Income Tax Return, and Form 1040NR, Nonresident Alien Income Tax Return. If you have foreign source income and withheld foreign taxes on Form W-8BEN, you may be subject to a U.S. tax withholding based on these payments. See Taxes withheld from foreign sources ‖, later, if you are a nonresident alien, and you have foreign source income withheld because you are not a U.S. citizen. 7. Part IV — Net Income Before Withholding: Indicate on line 11 whether any of your foreign source foreign income is exempt from income tax because it is an exempt U.S. source. The exemption is applied twice: first to any income included on line 6 above and then to any income not included for the reason indicated on line 11. If you are a United States citizen, use line 11 to exempt income earned in Puerto Rico or the U.S. Virgin Islands. If you are a noncitizen, and you have income from foreign sources in Puerto Rico or the U.S. Virgin Islands that is excluded from your exempt U.S. income because you have no U.S. source income, you may need to include the foreign source income on line 1A using Form 8829, Report of Income From Foreign Source. See the Instructions for Form 8829 for more information.

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FAQ - W8-ben instructions

Can I trade stocks on the NYSE from Dubai? What trading brokerages are available in Dubai?
Yes, you can. You can open an account with one of the online brokers (Interactive Brokers, ScotTrade, TradeKing, etc). The usual documentation while opening the account include the id proof (passport, Emirates ID), proof of address and foreign tax beneficial owner form (W8-BEN). Once the account is opened, you will have to send the signed W8-BEN form to the broker's US address.To fund the account, you will receiving wire instructions from the broker once the account is opened. Just go to any of the banks of money exchange counters and they will be able to wire the funds in your account. Once the account is funded, you're good to go!Most of the brokers have minimum fees and trading volume requirements, so do your diligence before opening the account. Choose one that suits your trading appetite and frequency.
How is it possible to open an account in TD Ameritrade for non-US residents?
It is possible. I am a Bulgarian, and I managed to do that. Best thing is to just contact the support by dropping them an email, and theyu2019ll write back with all the documents that are required for you to register with TD Ameritrade (few banks statements). The whole thing took like month and something, since in the end they send you a regular mail with your account number and PIN, but it is a lot faster to just contact the support and ask to activate your account.Hereu2019s what the support answered to me: Thanks for your email and your interest in TDA. I can confirm that we are able to open accounts for residents of Bulgaria. To get started, please visit the following link: https://invest.tdameritrade.com/... You will need to print out and sign the application before faxing it to us. Please be sure to include a passport copy, a bank or brokerage statement (in English), and a W-8BEN. In order to transfer from IB to TDA, you will need to submit a Transfer Form.
How should a consulting & development company in a non-tax-treaty-country deal with the W8-BEN form when providing services for US companies?
The purpose of the W8-BEN is to to establish the foreign status of the recipient of the income and to confirm that the income is to flow to that recipient; otherwise the withholding agent is required to withhold at the 30% rate. The withholding agent - in this case, the US client - should not withhold on non-US source income payments to the foreign person once the W-8BEN is received, and income for services performed outside the United States by a nonresident alien is not considered to be US source income even if paid by a US payer. Publication 515 (2023), Withholding of Tax on Nonresident Aliens and Foreign Entities covers this:The place where the services are performed determines the source of the income, regardless of where the contract was made, the place of payment, or the residence of the payer.A US Tax ID Number is required on Form W-8BEN if the recipient is claiming tax treaty benefits or is a foreign partner submitting the form to a partnership that is conducting a trade or business in the US (and a couple of other of cases which are less common). Since neither of these applies in this case, it is not necessary to put a US Tax ID number on the form - note that line 6 on the W-8BEN states that the number is included if required per the instructions. Parts 2 and 3 of the form are left blank in this case.My experience is that there are US clients that don't know the rules on foreign source income, in which case you should point them to Pub 515.
How do Canadian companies register their business with the IRS?
I am opening an account with Ameritrade to trade stocks and options. I have a question about filling W8-BEN. Being an Indian citizen, living in India, what should I mention in Claim of Tax Treaty benefits? (Special rates and Conditions)
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