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Is interest income earned in the US subject to withholding tax when paid to a foreign person?
Wiki User
∙ 13y ago
Yes it is possible that the payer of the interest income would be required to withhold some taxes from the source of the interest income that is being paid to a taxpayer.
Wiki User
∙ 13y ago
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WHAT TYPE OF A TAX IS A INCOME TAX?
Income Tax is an Indirect Excise Tax. Congress has imposed the tax on 3 classes of persons which are NON-Resident Aliens, Foreign Corporations deriving US Domestic source income and US Citizens residing abroad with foreign earned income. The term "US Person" denotes an US entity that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. From IRS.GOV "You are a withholding agent if you are a U.S. or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding."
Is a retired person's income subject to Social Security taxes?
According to IRS publication 54 (2007), pensions are "unearned income" and thus in the same category as capital gains, dividends and interest income. Withholding tax is not assessed on pensions, capital gains, dividends and interest.
Withholding tax rates on interest payment?
When you dont give bank etc. your tax file number they end up withholding tax of about 45%, but dont worry you can claim back the correct amount at the end of the year on your income tax return - you just have to write down the amount of interest you earned under the section that states "tax withheld."
What is the formula for times interest earned ratio?
Times Interest Earned = Operating Income/ Interest Expense.
Interest earned on interest is known as?
Compound Interest
Compound interest is interest paid on interest previously earned?
yes
How is interest different from compound interest?
Simple interest is interest paid on the original principle only, Compound interest is the interest earned not only on the original principal, but also on all interests earned previously.
Is foreign earned income reported on state tax returns?
No, it is not. Also, Did you know there is an online test you can take that determines your eligibility for the foreign earned income exclusion? (Click on the link to take the test): <a href="http://taxplannercpa.com/foreign-earned-income-exclusion-eligilibility.php">Foreign earned income exclusion</a>
Does cooperative society pay withholding tax?
A Cooperative Society does not pay withholding taxes. Withholding taxes are taxes deducted at source from incomes earned by individuals and corporate bodies that are subject to payment of taxes. The taxess so withheld are subsequently deducted from the final tax liabilities of such individuals/corporate bodies. Since Cooperative Societies do not pay taxes on theirprofits it will beimpossible to deduct such withheld taxes and so the Cooperative suffers.
How much interest is earned on the account?
A $5000 investment at an annual simple interest rate of 4.4% earned as much interest after one year as another investment in an account that earned 5.5% annual simple interest. How much was invested at 5.5%?
Type of interest is calculated by adding the interest earned to the principle?
Compound interest
A company's fixed interest expense is 8000 its income before interest expense and income taxes is 32000 Its net income is 9600 The company's times interest earned ratio is?
Formula for times interest earned = earning before interest and tax / interest expense Times interest earned = 32000 / 8000 = 4 times
