1

If a non resident-alien happens to deposit a significantly big amount of money in a US bank (let's suppose NYC), buys an estate/asset, gains passive income with his bank account-related interests , and happens to stay in the US only 3 months each year, as far as I know, he does not fall under ruling on being a US tax resident, which entails taxation over any other income outside the US, henceforth he's liable to pay only taxes on US generated income and property taxes yearly for his asset, because of the 183-days rule in a period of three years.

My question's about whether such a person can ask his reference bank to withhold the due tax amounts and file tax returns on his behalf, or somehow get the IRS involved on payment-related automated process agreements which happen to be iterated quarterly or monthly rather than yearly, since such a person may not be present on the US when tax returns have to be filed or have the possible burden to fly in the US just to file a tax return

I perfectly know that tax incomes shall be filed because there might be incomes other than these interests, but I'm assuming that it's not feasible for such a person seeking for and gaining any other income because

-he does not need it

-he actually doesn't gain any other income

-3 months each year are not a befitting scenario in which a person might work, especially if he's rich

I'm also assuming that he opens a bank account in a bank that allows non residents to do so, even without a SSN, but only with a ITIN (which is a subsitute of SSN in the case of non resident aliens).

So, is it possible for such a non resident alien to ask his bank to withhold due taxes, and file on his behalf, under the premises above?

Improve this question
5
  • 3
    I think a bank wouldn't touch this arrangement with a ten-foot pole, as they'll want to stay as far as possible from their depositors' relations with the IRS. However, you might be able to privately hire an accountant or attorney or EA (someone who's an "Enrolled Agent" under IRS rules) to do so under a Limited Power of Attorney. In any event, you don't have to be physically in the US to file a US tax return. See this IRS page: irs.gov/individuals/international-taxpayers/…
    – DavidSupportsMonica
    May 19, 2020 at 14:50
  • But don't banks declare gained interests to the IRS itself?
    – us er
    May 19, 2020 at 14:57
  • Yes, they must do so. That process is wholly automated and requires no human intervention. It is a big step, however, from saying "This is what the depositor earned" to "This is what the depositor owes you." I'm a retired lawyer in the US, and have had some experience in dealing with financial institutions. Certainly go ahead and ask a bank if they'd do this for you, but do not be surprised when they decline.
    – DavidSupportsMonica
    May 19, 2020 at 15:03
  • Got it, probably banks fear to make wrong calculations and get busted for it afterwards (I don't know whether the IRS tells how to pay, after the filing, or payers have to figure out themselves)
    – us er
    May 19, 2020 at 15:16
  • Yes. What you're asking to be done is not necessarily simple, given the required inputs of amounts, short-term gains, long-term gains, credits, and probably others - I'm not a tax guy.
    – DavidSupportsMonica
    May 19, 2020 at 16:38

2 Answers 2

Reset to default
1

The bank should withhold taxes on request. The issue would be with filing a return on your behalf, because tax preparation is a different business from banking.

On the other hand, there should be no problem filing a return yourself. Returns are filed electronically or by mail, not in person, so there is no need to be in the US to file one. As pointed out in a comment, the IRS provides instructions for filing from outside the US, including an address to which you can mail a paper return.

Taxes for US income of non-resident foreign persons are complicated enough that you should get a US tax accountant's advice.

Improve this answer
1
  • Thanks for pointing that out too. There are enough instances of banks withholding and transmitting that my earlier comments seem increasingly not useful. I'll delete them. Prudence would still dictate the OP should make sure the bank will do what's wanted before a deposit is made.
    – DavidSupportsMonica
    May 20, 2020 at 15:37
0

If you want to make payments on a quarterly basis, you can do so yourself without involving the bank. In fact, you are required to do so under certain circumstances when you have a significant amount of income that is not subject to withholding, or for which the withholding is not adequate.

The quarterly estimated tax payments and any withheld tax is then credited against the total tax liability you calculate on your annual income tax return. If the tax liability is greater, you make an additional payment with the return. If the tax liability is less, then you may choose whether to receive a refund or credit the surplus toward the next year's tax liability.

If you want someone to prepare your income tax returns for you, you can engage the services of an accountant.

Improve this answer

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.