W-8BEN tax process for Non resident aliens?
I am citizen of India living in india .But, I opened a Trading account with US brokerage for trading stocks and derivatives in US markets.
I also signed a W-8BEN form with the brokerage.
I am not clear how this tax process works.I am clear that tax will be 30% for the Interest earning income.But, I did not have clear picture of how tax process for the profits i make from trading stocks or derivatives in US markets.
1.Let's say, I made a profit of 1000$ in trading stock.Does all that money (1000$) will be deposited in my trading account and available for withdrawl?
2.They tax some % of money in that 1000$ and deposit the rest of money in my trading account which can i withdraw at anytime?
3.How it works?
Can anyone please explain to me in simple and easy way without confusing ?
By filing out a W-8BEN and certifying you qualify tax treaty benefits, you would receive full payment, instead having tax withholding applied to your earnings.
Without a W-8BEN, you would certainly have 30% taxed in the US, so for everyone $100 you get, you'd only receive $70.
You still have to report 100% of your income generated in your own country, however.