Is holding US stocks through a US broker enough to have to report to US taxes

Is holding US stocks through a US broker enough to have to report to US taxes

Manage alerts

Loading saved threads...

john goodheart · External communityPost link
External question — Personal Finance Stack Exchange Author: john goodheart Original post: https://money.stackexchange.com/questions/158217 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I was never a US resident and I don't have a citizenship or green card. However, I would like to invest via an American broker, simply because they have the best commissions. I am not sure which US tax laws apply to me. Do I have to fill an annual report to some US authority ? Do I have to pay can kind of tax? Investopidia says that non-resident citizens have to pay a 30% tax on dividends (presumably less if I live in a country with a tax agreement with the US). But it also says Foreigners who are not resident or nonresident aliens of the U.S. do not pay any taxes on their investments to the U.S. government. They will most likely have to pay taxes on their investment earnings in their home country. I couldn't find the difference between a non-resident and a Foreigner that isn't one. So which tax laws apply here? A link to any document explaining this will be great. Thanks,
Quote
Report
littleadv · External communityPost link
External answer — Personal Finance Stack Exchange Author: littleadv Original post: https://money.stackexchange.com/a/158222 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Foreigners can be residents. If you passed a substantial presence test for example, you'd be a tax resident even as a foreigner. On the other hand, US citizens are tax residents even if they've never been to the US in their entire lives and consider themselves foreigners. More specifically to your question: you'll pay 30% tax on dividends (or whatever the tax treaty says), but you won't be charged with capital gains tax. You might need to file annual tax returns and potentially claim refunds if the broker withholds more than you actually owed. You'll also need to coordinate this with your home taxes. Depending on whether or not there's a tax treaty, you may end up paying taxes in the US and back at home on the same income ("double taxation"). Even with a treaty, reporting may end up being complicated. I suggest you talk to a tax adviser in your home country to understand this better.
Quote
Report

Post Reply

Checking account access…