Knowledge Base/Selling: How does it work, and how do I get paid?/Taxes and Documentation

How much will it cost me if I am a Foreign Artist and I don't turn in an ITIN?

John Boudreaux
posted this on May 12, 2010 06:03

That would depend on the source of your sales—specifically, how much of your income results from U.S. sources. Just to provide a rough idea: Say, for example, you had $1000 in sales and your royalty rate is 50%.  $500 was U.S. Source, and $500 was foreign Source. In this scenario, $250 of your $500 royalty (on $1000 in sales) would be subject to U.S. tax withholding at a 30% rate, which would cost you $75. Therefore, your revenue payment would approximately $425 on sales of $1000, as opposed to $500 with an ITIN in place (assuming your tax treaty rate was 0%).

If you choose not to get an ITIN, you will still receive your Royalties, but they will be subject to the maximum withholding of 30%.

 
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