Tax for none US residents

[sportourer1]

Does anyone have experience of this issue, obtaining an ITIN and filling in the forms to prevent tax deduction by the IRS? As a UK resident I can do this but it seems so complex I may need an accountant!

[HarryT]

If you're in a position where you're earning income from overseas companies, you really should have an accountant, yes; it's a very complex field.

[sportourer1]

The first hurdle is getting documents certified to prove UK status to the IRS. Everyone keeps advising getting published on Smashwords but this is hurdle to clear first

[HarryT]

Would a copy of your P60 not be acceptable?

[sportourer1]

If only. Documents must be certified copies, passport etc. There are several companies in London that will do the whole thing for you. Just waiting for prices!

Published my book on Smashwords anyhow because you can defer receiving any royalties until you have the tax issue sorted out.

[James_Wilde]

Originally Posted by sportourer1

Does anyone have experience of this issue, obtaining an ITIN and filling in the forms to prevent tax deduction by the IRS? As a UK resident I can do this but it seems so complex I may need an accountant!

Call the Foreign Office or visit your local passport office and get a certified copy of your passport. Cost here in Sweden was about 300 kr, or, say, £25. Send that with the form W7 you can download from the IRS site to the address in Austin, TX, and wait. They say it takes 8 weeks. On the same site you can find copies of the Tax Treaties applicable, and you have to cite treaty and paragraph in the application.

Unfortunately I only applied four weeks ago, so I can't yet say how accurate the 8 week estimate is. When you get your ITIN you can send a copy of it to Smashwords, Kobo, B&N, Amazon, Old Uncle Tom Cobbley and all.

[jbcohen]

I would ask irs.gov for the answer.

[James_Wilde]

Here's the actual page at the IRS site. You can see a reference to the form W7 and an instruction booklet, called, I think I7 on how to fill it out.

http://www.irs.gov/individuals/artic...=96287,00.html

[sportourer1]

Thank you one and all. I thought the Revenue were form-laden here but clearly the IRS could give a run for money

[neilmarr]

Harry's 'complex' is an understatement, Sportstourer. Everywhere you step the land is mined.

My own wee indie publishing house hired an accountant and lawyer and officially registered in the US as BeWrite Books LLC in September. Took us about six months, and not a little expense.

The up-side, though, is that we can now deal direct with the massive new ebook retail stores who exclude publishers without an 'official' US presence and can upload our own carefully produced files rather than using an auto-conversiona aggregator. Makes a world of difference.

But ff you're thinking only in terms of a single title or a handful, you could try to find a trusted pal in the US who will offer his own tax code, SS number and bank details.

Good luck and best wishes. Neil

[mr ploppy]

I thought Smashwords stopped witholding tax for non-US publishers a few months ago? I'm sure I read it on their blog somewhere, but can't find it now.

[neilmarr]

We're registered both in Canada and the US, Mr Ploppy. But when we withdrew all our titles and opted out of Smashwords, they still retained 30% tax at source when they settled up last week. I guess we could claim it back if we felt it worth jumping through hoops for a hundred bucks or so. Neil

[brecklundin]

Originally Posted by neilmarr

We're registered both in Canada and the US, Mr Ploppy. But when we withdrew all our titles and opted out of Smashwords, they still retained 30% tax at source when they settled up last week. I guess we could claim it back if we felt it worth jumping through hoops for a hundred bucks or so. Neil

You would need to file a US tax return. But as people have mentioned our Infernal Revenue Service is a rats nest of over-officiousness run via forced compliance for the small guy. The big money corps get away with murder. I offer an example the current owners of the Los Angeles Dodgers baseball team have not paid any income taxes for at least a decade as I recall. And done so legally. See they run everything through various "independent" companies as use loans to pay themselves. I try not to pay attention to it all but the two of them are in the middle of a gawds awful divorce an all of their extravagances and excesses have been dragged out into the public eye. still, from an income tax POV they have not broken a single law...in fact, as we have learned it is a fairly common practice...and we are talking as much as $100M/yr in some years. Basically I think they loan themselves money and eventually just default on the loans creating write off's for the company which loaned them the money. I am sure I screwed up some of these "details" but that is the gist of it...sad, very sad...oh, they bought one home simply for the pool...a $10M home in either Belair or Holmby Hills places with make Beverly Hills look like the low rent district.

If you want some laughs just google "McCourt Divorce"...

[sportourer1]

Glad to see the IRS no different to our own HMRC

[James_Wilde]

Originally Posted by James_Wilde

Call the Foreign Office or visit your local passport office and get a certified copy of your passport. Cost here in Sweden was about 300 kr, or, say, £25. Send that with the form W7 you can download from the IRS site to the address in Austin, TX, and wait. They say it takes 8 weeks. On the same site you can find copies of the Tax Treaties applicable, and you have to cite treaty and paragraph in the application.

Unfortunately I only applied four weeks ago, so I can't yet say how accurate the 8 week estimate is. When you get your ITIN you can send a copy of it to Smashwords, Kobo, B&N, Amazon, Old Uncle Tom Cobbley and all.

(quoting my own optimistic post from 7 weeks ago)

Ho, ho, ho! 8-10 weeks they say in the brochure, for mail to foreign destinations. It's now 11 weeks so I rang to ask if there was a problem, and of course there was. Why are government employees in ANY country so dumb, and rigid?

My application was rejected - though nobody was going to tell me so if I hadn't asked - because it apparently lacked supporting documentation. I applied on the basis of exception 2, but should have applied on the basis of exception 1d, and the extra documentation I need is - wait for it - a letter on the letterhead paper of the company which is going to withhold tax stating that they must withhold tax from <my name which must be in the letter> on account of royalties payable to a non-resident alien. Can you see Amazon giving me a letter like that? Or Smashwords or B&N or Kobobooks?

So I have two choices: let them all withhold 30% - the tax is anyway higher than that here in Sweden; or get them to send the money to our daughter who happens to live there, and let her pay the tax, if she pays less than 30%.

Has anyone got such a letter from one of the retail outlets btw? And how about that business with Smashwords about how they're just a distributor or something?