International Accounts:
If a valid W-8 BEN is filed for the account, the Internal Revenue Service only withholds a small amount of tax on dividends received. The rate varies from country to country, but it does not exceed 30%.
Investors are responsible to report any capital gains or capital losses to your local tax authorities. However, a separate tax return is not required to be filed in the United States. A Form 1042 is mailed to you during tax season.
When a valid Form W‑8BEN is not on file or has expired, U.S. brokers are required by the IRS to apply the default 30% Nonresident Alien (NRA) withholding on dividends and certain interest payments, as well as a 24% backup withholding on all gross sales proceeds. Please note that backup withholding cannot be reversed by the brokerage firm.
To request a refund of U.S. backup withholding, you must file directly with the IRS. This requires submitting IRS Form 1040‑NR along with the tax document 1099 Consolidated as proof of withholding. NRA withholding refunds may require 1042-S. We recommend contacting a tax advisor or accountant for guidance with this process. Additional details are available at irs.gov.
Domestic Accounts:
All taxable events in your account are recorded in the appropriate tax document. These documents are available in the Tax Documents section on both the mobile app and the website. Tax documents are generated and become available for download between January and April of the year following the tax year, depending on the type of form.