Help with tax Form 1042-S

Discussion in 'Retail Brokers' started by zdexmas, Mar 28, 2003.

  1. zdexmas

    zdexmas

    Can someone explain to me what the tax Form 1042-S is about? and what i have to do with the form? ,
    I get the Form 1042-S in my mail from pointdirex i am nonresident alien and as far as i know i don't have to pay capital gains taxes, but i am little confuse about this form can someone help me ':('

    THANKS.


    mike.
     
  2. Aaron

    Aaron

    1042-S is where Pointdirex is reporting to you the US Federal Taxes they withheld from your account and paid to the US Federal Government.

    If you are a US taxpayer (and you don't have to be in the US or a US citizen to be one) then the amount withheld will be applied to your tax liability. If you are not a US taxpayer then you don't have to do anything further with this form.

    And that's my layperson's opinion. I'm not a tax lawyer. Schindler Trading withholds taxes on the small amounts of interest our non-resident alien investors earn on their accounts. We don't have to withhold on capital gains.
     
  3. zdexmas

    zdexmas

    thanks for the reply Aaron so this is just a report that they give to the IRS ,the thing is that i am no longer with pointdirex i move to IB months ago, i read in the form and said in the income code line said : 01 is this 01 mean they are charging me some Interest?
    can someone tell me thanks.


    mike
     
  4. Aaron

    Aaron

    Yes, income code 01 means the tax was withheld from interest you earned.
     
  5. zdexmas

    zdexmas

    OK Aaron just one more thing the last question :D
    in Line 6 Exemption Code said : 05
    i read the translation of 05 is (Portfolio interest exempt under an Internal Revenue Code section), is this mean i don't have to pay
    this interest?

    thanks for all your help...
     
  6. Aaron

    Aaron

    Just to be clear, your 1042 is <b>not</b> telling you what you have to pay. It is reporting to you what, if any, amounts have already been paid to the US government on your behalf. It's a report, not a bill.

    Line 6's exemption code is giving the reason why nothing was withheld (and paid to the US government) on some of the interest you earned.

    Hmmm. Why aren't my boldface HTML tags working?
     
  7. zdexmas

    zdexmas

    ok i get it now thanks for all your help Aaron :)


    mike.