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Mail Bag #12: EIN for online sales in US, B-2 Visa for Int'l Students, French Health Insurance, Real Estate Commissions, W-9 from HK bank, Divorce Settlements

Mail Bag #12: EIN for online sales in US, B-2 Visa for Int'l Students, French Health Insurance, Real Estate Commissions, W-9 from HK bank, Divorce Settlements
Ines Zemelman, EA
24 December 2017

EIN for online sales in the US

My company currently sells online in the US and we have discovered that we should have an EIN which is required to register for the various states' sales taxes to be compliant.

Can you arrange this for a company based in Gibraltar and if so, at what cost and timing?

In order to get the EIN for the foreign company you should first obtain an individual tax number (ITIN) to appoint the responsible party with the US tax ID number.

To get the ITIN you should file form W-7, thereafter to the EIN they should file form SS-4. Alternatively, you may appoint as your agent signing the application a US person who would provide their tax ID and sign the application for EIN - that would make the entire process faster.

This package (W-7 & SS-4) costs $500 together.

EIN for online sales in the US

International Student B-2 Visa

I am an international student and I have a nuanced question regarding receiving a 1099 MISC for work done online when I was on a B-2 visa (as opposed to the F-1 visa I am on now). This was for the 2014 tax return that I have not yet filed. I would like a consultation regarding this issue with an experienced member of yours in non-resident alien taxes. Please let me know how much the consultation would cost. It can only be through email as I just need to know whether I should file my tax report or not. I don't owe taxes to the IRS but rather they owe me tax return money. However, due to me switching visas and the 1099 MISC I am not sure what I should do.

First - you should file tax return for 2014 whether you believe you owe tax or not because you have a 1099-MISC issued to your Social Security number. The IRS will get to you regarding this nonreported income sooner or later. There is no statute of limitations on nonfiled returns.

Second, which type of return (resident or nonresident you should file) depends on whether you met the Substantial Presence test for 2014 or not. If you did not meet the substantial presence test for 2014 then it will be nonresident return and income reported on 1099-MISC will be tax exempt (but reported first). If you met the Substantial Presence test then you owe income tax and Self-employment tax on that income provided that you earned more than $400.Of course, we will determine all necessary forms after analyzing your completed tax questionnaire.

International Student B-2 Visa

French Health Insurance

I moved to NY in late August of 2017. I'm still covered by French social security through this year (if considered as a long visit) --- will I owe a penalty on my 2017 tax return?

The allowable "Short gap" is 3 months. If you had health insurance from November there would be no penalty. If you are in the US for 5 full or partial months (August through December) - then you will pay a penalty on all 5 months.

French Social Security made you exempt only while you stayed outside of the US. Upon moving back you had a qualifying event which allows 60 days to enroll in a new plan - please see our Affordable Care Act Q&A & tax impact for expats.

French Health Insurance

Real Estate Commission

Hi I have a question regarding income. My husband is in real estate and will be making a significant commission this year. He is not a us citizen or resident. He does have a non resident alien number. We have some bank accounts that we share and others that we don’t. Will his commission income going into our shared account effect us at all. Also he has a family trust account that was established before we were married. He owned a rental property with this account but I have never been on the account. This year he sold the house. Will the income from that effect my taxes. I believe you filed head of household for me last year.

If your husband is a non-us citizen you do not have to report his earnings to the IRS. If you did not own that house that was sold, you do not need to report it.

You should not worry about significant income growth on joint accounts reported on FBAR. It is apparent that joint account has income received by a non-resident spouse that other spouse does not need to report. Just be aware that if the total value on all foreign accounts (those owned jointly and separately) reaches $300K at any time during the year you will have to file one more financial reporting form, 8938 - but this is just a reporting requirement, no tax obligations.

Real Estate Commission

W-9 from HK bank

I have a question about my spouse. She is a Japanese citizen and I am filing taxes jointly with her. We have a shared bank account in Hong Kong, where we used to live earlier. Now the Hong Kong bank is asking her to either submit a form W9 or W8 for FATCA compliance. I am not sure which form is the right one. Could you please advise me on this point? Does she need to submit a W9 or W8 to the Hong Kong bank?

Filing a joint return with an NRA spouse makes her a U.S. resident for tax purposes.

Your wife is still not a US citizen and not a US resident alien.

Form W-8BEN is the right form for her FATCA compliance (i.e. she is not subject to FATCA reporting).

W-9 from HK bank

Divorce settlement

I am currently in divorce proceedings and likely to be given a pension sharing order by which a lump sum will be transferred from my husband's UK pension into my UK pension. Are there any tax implications for the transfer into my name of which I should be aware?

The lump sum transfer from an NRA's account is a part of divorce settlement. Divorce settlement is not taxable income. When you receives transfer from divorce settlement it is recommended to file Form 3520 (although not required). When you later receive distribution from your own UK pension, this will provide you with an explanation and supporting document for the nontaxable portion of the distribution.

Divorce settlement

Ines Zemelman, EA
founder of Taxes for Expats