I'm getting 30% withheld in taxes(even after filling the w8) on the non-used balance interest since their standard fund(cat mm) pay the interest as a dividend. However IB does not withhold my interest income only the dividends so there is gotta be a way to decrease this with a fund that pays the interest directly. Can anyone help?
Money market funds all pay dividends. Is there not an option to collect interest on the free credit balance instead?
Daal, There are a few things that could be causing this. This is based on the tax treaty the US has with his specific country to pay his portion of taxes, maximum 30% withholding on dividend and interest income to the account. I would want to ensure that TEFRA issues were resolved. If you can PM your name I will be able to confirm whether its a TEFRA issue. Also, this may be a requirement of the country you are from and the fund you are invested in. Please also include the name of the funds you are invested in and the country you are from. IB and MB follow the same rules so it could potentially be the difference in the fund you are invested in. With this information I will be able to resolve or at least explain why the withholding. Regards, Steve