Dealing with the IRS from outside the US

nkkingston · Apr 6, 2011

I have no clue where to put this, but the Roundtable seems as good a place as any.

Last year Tease was accepted by Loose Id, and has been selling since August. I live in the UK, Loose Id is based in the US. Long story short, I underestimated how long it would take the IRS to send me an ITIN, so for the first few months Loose Id docked 30% of my royalties to pay the tax man.

Now, I'd quite like that 30% back. After all, I'm going to be paying tax on them in the UK.

Loose Id have sent me form 1024-S. They've filled in most of it for me, which is really useful because I wouldn't have known where to begin. Reading all the instructions and advice online, I think I've got the forms filled in okay. I've even found the address to send them to.

Of all the forms I've encountered through the IRS (W-7, W8-BEN etc) this is by far the hardest to figure out. Some of the 'helpful' instructions the IRS offers are 90 pages long, and appear to be solely concerned with filing online. As far as I'm aware, I don't have to file taxes in the US due to the tax treaty (and the fact I'm paying them here in the UK).

Has anyone else done this before? Do I just send the forms off? Do I need some kind of covering letter explaining what I want? Do I need to fill in more forms (like 1040 and it's brethren - something to do with filing taxes)? Help me, Absolute Write, you're my only help!

(especially since all the 'help' the IRS links to is either 'walk in' - that'd be a very long walk! - or over the phone. I don't want to have to resort to a long distance call over this!)

IceCreamEmpress · Apr 6, 2011

1024-S is super complicated. That said, if you are sure you haven't made any of the errors detailed in the "most common errors" publication, it should go through fine.

You don't need a cover letter; just mail the form. It will probably be a few weeks before you get the refund, considering the time of year (April 15th is the annual income tax deadline here in the US) and the government shenanigans (if there is a shutdown because of the budget, the IRS closes).

cameron_chapman · Apr 6, 2011

nkkingston said:
(especially since all the 'help' the IRS links to is either 'walk in' - that'd be a very long walk! - or over the phone. I don't want to have to resort to a long distance call over this!)

Can't be of any help regarding the forms, but if you do need to make a call, sign up for a Skype account and use your computer to call (you can do voice-only calls, and if you use a headset it's not much different than a regular phone call). I think the unlimited plan with international calling is less than $10/month (around £6-7 or so, I think). Might be even less than that.

Becky Black · Apr 6, 2011

If you happen to be having a trip to London in the near future you could maybe go to the IRS office at the American embassy. I went there with my W7 form for getting my ITIN. They were dead helpful and it all went through smoothly. You don't need an appointment or anything, though you might end up having to wait for a while, especially at this time of year! You could maybe email them to ask for advice too.
[email protected]
If you do decide to go there, check the embassy website for rules about visiting - there's a load of stuff you're not allowed to take in!

firedrake · Apr 6, 2011

nkkingston said:
I have no clue where to put this, but the Roundtable seems as good a place as any.

Last year Tease was accepted by Loose Id, and has been selling since August. I live in the UK, Loose Id is based in the US. Long story short, I underestimated how long it would take the IRS to send me an ITIN, so for the first few months Loose Id docked 30% of my royalties to pay the tax man.

Now, I'd quite like that 30% back. After all, I'm going to be paying tax on them in the UK.

Loose Id have sent me form 1024-S. They've filled in most of it for me, which is really useful because I wouldn't have known where to begin. Reading all the instructions and advice online, I think I've got the forms filled in okay. I've even found the address to send them to.

Of all the forms I've encountered through the IRS (W-7, W8-BEN etc) this is by far the hardest to figure out. Some of the 'helpful' instructions the IRS offers are 90 pages long, and appear to be solely concerned with filing online. As far as I'm aware, I don't have to file taxes in the US due to the tax treaty (and the fact I'm paying them here in the UK).

Has anyone else done this before? Do I just send the forms off? Do I need some kind of covering letter explaining what I want? Do I need to fill in more forms (like 1040 and it's brethren - something to do with filing taxes)? Help me, Absolute Write, you're my only help!

(especially since all the 'help' the IRS links to is either 'walk in' - that'd be a very long walk! - or over the phone. I don't want to have to resort to a long distance call over this!)

Scarlettpeaches posted a very good thread about all of this somewhere, I just can't remember which part of AW. Plus, she also posted about it on her blog. Although I think your situation is slightly different because you're claiming back what you've already paid.

Pyekett · Apr 7, 2011

Do you carry US citizenship, or is the only tie to the US through the location of the publisher?

Anyone with US citizenship has to file a US tax return on money earned anywhere worldwide, even if you live outside the US. There are ways to mitigate the payment,* including the foreign earned income exclusion and foreign housing deduction, but it's a maddening process to sort out.

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

Of course, if you aren't a US citizen, that's all thankfuly moot.

----

Edited to add: I'm a Permanent Resident of Canada who retained my US citizenship. Sometimes I work on one side of the border, sometimes on the other. I know the UK situation is different in some ways, but this page specific to my situation clarifies some of the bigger points (in case other US citizens living abroad pop in):

United States citizens living abroad:

Are required to file annual U.S. income tax returns.

Must report their worldwide income if they meet the minimum income filing requirements for their filing status and age.

...[bolding and underlining added]

*For US citizens in Canada, there is a specific formula that seems to take into account what is paid to Canada in calculating what is still owed to the US. It isn't a straightforward deduction, though.

nkkingston · Apr 7, 2011

@pyekett I am entirely and solely a UK citizen, with no ties to the US apart from through publishing. There's a tax treaty, though, so any tax owed in the US is paid to the UK. My concern at the moment is I've paid (or am about to pay) tax twice on some months.

@ICE handily, Loose Id did most of the filling in for me. All I had to do was my address and NIN. I got the impression just sending off the forms would be enough, but I couldn't find anything to back that up.

Thanks all for the advice. I'm currently working (day job) 6 days a week, so it'll probably be May before I get a chance to send everything off. Fingers crossed it'll be sorted fairly quickly. I was a little concerned one of the IRS helpsheets said "if submitted before th final date, will be assumed to have been admitted on the due date" when the due date is two years after the tax year... Might be a while before I see the refund, regardless of whether I cock it up!

Pyekett · Apr 7, 2011

nkkingston said:
@pyekett I am entirely and solely a UK citizen, with no ties to the US apart from through publishing.

From a tax payment point of view, you have nothing but my congratulations.

*grin

Best of luck in working it all out. Sounds like you are on a solid path.

nkkingston · Apr 7, 2011

Pyekett said:
From a tax payment point of view, you have nothing but my congratulations.

*grin

Best of luck in working it all out. Sounds like you are on a solid path.

I've said it before and I'll say it again, I'm never so grateful for HMRC and their plain English as I am when I'm dealing with the IRS.

IceCreamEmpress · Apr 7, 2011

nkkingston said:
@ICE handily, Loose Id did most of the filling in for me. All I had to do was my address and NIN. I got the impression just sending off the forms would be enough, but I couldn't find anything to back that up.

Yes. Cover letters just get thrown away.

Thanks all for the advice. I'm currently working (day job) 6 days a week, so it'll probably be May before I get a chance to send everything off. Fingers crossed it'll be sorted fairly quickly. I was a little concerned one of the IRS helpsheets said "if submitted before th final date, will be assumed to have been admitted on the due date" when the due date is two years after the tax year... Might be a while before I see the refund, regardless of whether I cock it up!

I doubt they mean "We won't process it until the due date" but rather "You aren't late as long as it's submitted before the due date." They generally process things as received.

Captcha · Mar 20, 2012

I know, it's an old thread, but...

Are you guys talking about form 1024-S, or 1042-S? I'm in the same boat as the OP (even with the same publisher!) and I got a 1042-S from them, not a 1024-S - ?!?

jjdebenedictis · Mar 20, 2012

firedrake said:
Scarletpeaches posted a very good thread about all of this somewhere...

Found it!

Captcha · Mar 20, 2012

Yeah, that's a good thread for getting an ITIN... but I've got my ITIN. What I want is my money back! I want to turn Uncle Sam upside down and shake him until change falls out of his pockets.

IceCreamEmpress · Mar 21, 2012

Captcha said:
I know, it's an old thread, but...

Are you guys talking about form 1024-S, or 1042-S? I'm in the same boat as the OP (even with the same publisher!) and I got a 1042-S from them, not a 1024-S - ?!?

It's the 1042-S. I just reproduced Nikki's typo without checking.

This is peak annual income tax season here in the US, so my guess is that it will take 6 to 8 weeks from the time they received your form until the time they send your refund.

nkkingston · Mar 23, 2012

I have to say, I'm fairly certain I never received my refund, even after sending off the form. Should probably chase that up...

Becky Black · Mar 25, 2012

If I've never had anything withheld by my publisher (I had my ITIN ready before I started getting my royalties) then do I need to do anything with the 1042-S form they've sent me? Aside from carefully filing it away of course. Do HMRC ask for it at any point?

Dealing with the IRS from outside the US

nkkingston

Bemused Girl

IceCreamEmpress

Hapless Virago

cameron_chapman

Makes Things Up

Becky Black

Writing my way off the B Ark

firedrake

practical experience, FTW

Pyekett

I need no hot / Words.

nkkingston

Bemused Girl

Pyekett

I need no hot / Words.

nkkingston

Bemused Girl

IceCreamEmpress

Hapless Virago

Captcha

jjdebenedictis

is watching you via her avatar

Captcha

IceCreamEmpress

Hapless Virago

nkkingston

Bemused Girl

Becky Black

Writing my way off the B Ark