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What to do with 1042-S withholding tax credit slip you received

If all of your earnings are from treaty zero-rated withholding such as royalties from US publishers: You should claim a zero rate by providing W-8BEN to all (say, publisher) payers to prevent withholding from occurring at the get-go. Meanwhile to get back the money they withheld by claiming it back as refund by filing a tax return. Check that preparer fee versus refund will be cost beneficial. If you earning other US source income that is subject to withholding: See if that income is exempt from withholding, or if a reduced tax rate applies, under treaty Compare the amount withheld to the amount owed in withholding If correct, generally there’s no action to take or required (unless received

Pay less tax on your 1099 income

Did you receive a 1099-B from a US investment and report the capital gain on both your 1040 and T1 Canadian tax return? Brokers report only the "out of pocket" cost on the face of a 1099-B, but in its statements provide adjusted basis as supplemental information. Save yourself from paying tax not owed by reading the brokers supplemental information providing adjusted basis versus reading just the 1099-B providing only original cost basis. Cost basis is the original purchase price one paid for an investment plus fees/commissions. Adjusted cost basis includes adjustments to the price, such as corporate actions, ordinary income reported, dividend reinvestment, return of capital/principal and wa

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