W-8BEN and other tax questions

[swji89 41]

Hi all,

As a recently-married K-1 holder, I went to the bank 2 weeks ago or so to get added as a joint account holder with my wife. After explaining my situation, adding that I had applied for my SSN (which still isn't here because the DHS for some reason puts all middle names along with your forename as your first name so it didn't match up in the system automatically grrr! I did get the letter saying they'd sorted that part of it last week, though, so should expect my SSN card within a week or two).

Nonetheless, the guy at the bank (who was great in all honesty but, like a number of people aren't used to dealing with K1 holders!) insisted that because (a) I didn't have my SSN and (b) am not a resident of the US yet, I give a UK address and consequently, sign the W-8BEN form, which I did. He said that it's invalid once I become a resident, so he advised to just call the bank to update their information once I receive my SSN and then my Green Card etc.

I didn't think too much of it until today when my Mum tells me they've posted a W8-8BEN form to me at her address (the address I gave as, technically, I'm not a US resident yet). As I already filled that out at the bank, I'm a bit confused and so I've done some Googling as well as some searching on here and I'm a bit concerned that I shouldn't have filled in that form!

I am led to believe the details in the form become invalid when they are no longer up to date, so will that be the case when I receive my SSN? Can I then call the bank and get them to withdraw the W-8BEN? Should I have filled out the W9 instead?

Don't want to muck up things with the IRS which already seem complicated enough. On that note, as my wife and I have got married in the tax period 2015, should we file jointly in April? For our healthcare it says we need to file jointly for the 2016 tax year which is fine, as I hope to be up and running with a job etc. then once my EAD comes through etc.

Any advice will be much appreciated.

[Nich-Nick 3,354]

Since you are married to a US citizen, you can be considered a Resident Alien for tax purposes and file jointly with your spouse for tax year 2014. (See Publication 519 around page 9 or 10.). That is whether you work, meet the days counted, etc. You can do a W-9 with the bank. See this post where I wrote a little more about it. http://www.visajourney.com/forums/topic/572708-irs-itin-w-8ben-w-7-or-w-9/?p=7869255

Basically those forms are for tax purposes and you will be considered a "US person" to the IRS because you will file jointly. Read the link.

[swji89 41]

Thanks for that. So, I think my best course of action will be to wait for my SSN to arrive and then go bank into the bank to say that I don't need the W-8BEN and fill out a W9 instead as I am technically a US person for tax purposes? I was curious as to why they insisted on a UK address in my situation. Guess the guy simply didn't know what to do (neither did I to be fair).

[swji89 41]

On the phone with the bank as I speak! The woman I'm speaking to seems more knowledgable than others but she is insisting that because I lived in the UK for part of the 2015 tax year (i.e. January until I moved here in October) the W-8BEN form is the correct one at this stage. She's not sure what happens when I get my SSN and then Green Card. When I have my SSN I want to make sure they accept the W-9 but not sure what they will do.

This is even after explaining that by the IRS' definition I will be classed as a US person because I will choose to be when my wife and I file a joint tax return in April...

Will they ask for a W-9 once I have - and then give them - a SSN?! If the W-8BEN is good for 3 years I'm worried that this will muck things up. Maybe I try and call back once I have my SSN and ask to fill in a W-9?

Edited November 18, 2015 by swji89

[Nich-Nick 3,354]

On the phone with the bank as I speak! The woman I'm speaking to seems more knowledgable than others but she is insisting that because I lived in the UK for part of the 2015 tax year (i.e. January until I moved here in October) the W-8BEN form is the correct one at this stage. She's not sure what happens when I get my SSN and then Green Card. When I have my SSN I want to make sure they accept the W-9 but not sure what they will do.

This is even after explaining that by the IRS' definition I will be classed as a US person because I will choose to be when my wife and I file a joint tax return in April...

Will they ask for a W-9 once I have - and then give them - a SSN?! If the W-8BEN is good for 3 years I'm worried that this will muck things up. Maybe I try and call back once I have my SSN and ask to fill in a W-9?

Things like this are dependent on the bank and the person you talk to. K1s don't fit the business model really. I don't think it will muck anything up. Interest rates are so low right now that if you even earned any interest on the account and if they held back some, you wouldn't be missing out on much money...pennies maybe. So they send it to the IRS, and it all comes back to you when you file the tax return. It is similar to when an employer holds out money for taxes. They (bank) hold out part of the interest you earned if you are a non-resident because NRs are taxed at a different rate. Not worth fighting in my opinion.

You would need a SSN to do a W-9 because part of it is certifying that you gave them your valid number. For further knowledge when you deal with them again. On 2014 taxes you will be treated by the IRS like a resident alien for ALL of 2014, not just part of the year. That is because you married a USC. If you were just a Brit here working on a visa who later got a greencard through your job, that would be different. You get different treatment because of marriage to a USC. You are a resident alien all year for tax purposes if you and your wife elect to file jointly.

Edited November 18, 2015 by Nich-Nick

[swji89 41]

That is true. I was just concerned it would have negative consequences when it comes to filing jointly come April, but if not then I would agree the actual amounts of money involved are certainly not worrying about. It isn't the money I was worried about less than the process! Thanks again.

EDIT: Thanks for the additional info. regarding taxes. Do you not mean 2015 as won't we be filing in April for the Jan-Dec 2015 tax year?

Regarding my status, that's the situation I had in mind. One question - looking at Publication 519 it says that if we choose to file jointly I will be considered a US Person and, therefore, be liable for the same things US citizens are including being taxed on worldwide income. Does this mean that I will be taxed again in the US for what I earned (and was taxed on) in the UK between January and October of this year before I moved?

What are the benefits of filing jointly right away as a resident alien as opposed to filing individually as a non-resident alien (assuming that a miracle doesn't happen and I get a green card before the end of the year which I'm 99% sure isn't going to happen hahaha)?

Edited November 18, 2015 by swji89

[Nich-Nick 3,354]

Yes, I mean 2015 taxes. My brain seems to have lost a year.

You will report worldwide income, not be taxed on it. You qualify for the foreign income exclusion using Form 2555EZ. That eliminates the tax that would have been charged had it been US Income.

Advantage? Well since your foreign income gets excluded, it is mainly the wife's Income that gets taxed. She could file Married Filing Separately and you nothing. But that is generally more taxes for her in that category. When she files jointly with you, there is an additional $10,300 she gets to deduct from her income because of you. That reduces her taxable income. Less income to be taxed on. Best to work it out both ways--

1) Married filing separately. Only her income.

2) Married Filing jointly. Taking your Foreign Income Exclusion. Getting her income reduced an additional $10,300 for a spouse. It is actually reducing the "joint" income, but since you won't have any US taxable income in 2015, it is effectively reducing her income.

Pick the filing method that results in the lowest taxes. Both are legal ways to file.

[Roy&Chanel 109]

Hi Nich and others,

I have a question regards to this too. Recently I just came to United States on K1 Visa, and I opened a bank account with Chase using my SSN which I applied when I arrived a week after. Two weeks later, I received letters from them with forms of W8BEN and W9 requesting me to fill up. My husband and I went to the bank and they said that they need some residency ID evidence to proof in order to allow me to continue using my account, I only have an SSN which is not enough. I included my names in electric and phone bills but that will only be generated next month which bank only gives us few days to provide these information. They also insisted that it is right for me to fill up W8BEN which I had no idea if I am on the right path. How will this affect taxes for me in future when I get my EAD etc?

[Nich-Nick 3,354]

The best I can describe this is compare to when an employer holds back some of your income toward taxes and pays to the IRS on your behalf. The bank is required to hold back some of any interest your account may earn if you are foreign and here working on a non-immigrant visa with no green card in your future. Neither the employer or bank are taxing you or saying how much tax you owe. They are making an estimate. Your salary is taxable and any interest or dividends from bank or investment accounts are also taxable income. Only when you fill out your tax form do you know how much your tax is. If too much got withheld and sent to the IRS, the IRS issues you a refund. If not enough got withheld, you will write a check to the IRS to pay in the balance of what you owe. If you are foreign and here on a visa and working you would file tax form 1040NR. As a K1 on a path to a greencard, youare eligible to file jointly with your American spouse and file tax form 1040. You do not have to be considered a NR by IRS rules because of you marriage.

So this W-8BEN doesn't really do anything to your taxes. All it does is keeps some of your interest payments held back in reserve instead of giving it all to you monthly. What you owe in taxes is determined when you file. A W-9 says--I am a U.S. person with a SSN so you don't have to do any backup withholding on my account.

So a question for some of you. When they ask for your foreign address, why do you give them one? What do they say if you tell them you moved, sold the home, broke the lease or whatever and have no address in a foreign country? You have packed up your belongings and moved to the US permanently. There is no address to go back to. My bank asked for none of this when I added my husband, so I never got an opportunity to argue it. Either way you do it with the bank is not going to change your taxes so is merely one more example of how a K1 is sort of a "nothing" between arrival and greencard. You just wait it out.

[Roy&Chanel 109]

Thank you so much once again Nich, you've been really helpful all these times. Very knowledgeable!

So since I am submitting my AOS next week, will I be required to file Taxes for the year of 2015 with my husband?

[Nich-Nick 3,354]

Thank you so much once again Nich, you've been really helpful all these times. Very knowledgeable!

So since I am submitting my AOS next week, will I be required to file Taxes for the year of 2015 with my husband?

You do not have to file, but you MAY file jointly with your husband. Go back and read post 8 http://www.visajourney.com/forums/topic/575893-w-8ben-and-other-tax-questions/?p=7902044 where I described why it is often a good thing. In that, the Wife was the U.S. citizen. Think "husband" where I said "wife" if it is your husband who is the USC.