Received a 1099-MISC form from the IRS despite living in the UK. What do I do?

HendrikSavoo

This week I opened a letter and found 1 solitary piece of paper, which is a tax return form 1099-MISC. No other letter or instructions were included.

For a couple of years between 2012-2014 I used to post travel videos on YouTube and had my account monetised, but have not uploaded anything for over 7 years. However, I still receive minor payments from Google AdSense (and when I say minor I mean minor lol)), like maybe £300 for the year. So since there was a change in the tax laws, I guess this is why I am now "self-employed" as far as the IRS is concerned.

What do I do next? How do I know if I owe the money on the tax return form, or if they owe me?

If anyone can help, I would upload the form.

EdSwippet

Does box 4 of your form 1099-MISC show any US federal tax withheld? If yes, then you're entitled to reclaim this from the US, albeit -- and of course -- only after following a complex, lengthy, and baroque US nonresident alien tax return filing process. Otherwise you can probably just ignore it as far at the US is concerned. The GBP equivalent of whatever shows in boxes 1, 2 and 3 will however probably be UK taxable income ... perhaps unless you qualify for UK non-dom tax status.

To avoid this in future, update your Google/YouTube tax status to include a form W-8BEN; Google claims that AdSense should identify that you can use the US/UK tax treaty article 12 paragraph 1 automatically (did you set this account up from outside the UK?). After this, you'll receive a form 1042-S instead of a form 1099, and avoid any ongoing US tax withholding.

HendrikSavoo

EdSwippet said:

Does box 4 of your form 1099-MISC show any US federal tax withheld? If yes, then you're entitled to reclaim this from the US, albeit -- and of course -- only after following a complex, lengthy, and baroque US nonresident alien tax return filing process. Otherwise you can probably just ignore it as far at the US is concerned. The GBP equivalent of whatever shows in boxes 1, 2 and 3 will however probably be UK taxable income ... perhaps unless you qualify for UK non-dom tax status.

To avoid this in future, update your Google/YouTube tax status to include a form W-8BEN; Google claims that AdSense should identify that you can use the US/UK tax treaty article 12 paragraph 1 automatically (did you set this account up from outside the UK?). After this, you'll receive a form 1042-S instead of a form 1099, and avoid any ongoing US tax withholding.

Hi Ed.

The only boxes with any numbers in are box 2 Royalties ($99) and box 4 Federal Income Tax Withheld ($23). BTW, box 4 has emboldened borders, I don't know if that means anything. Anyhow, If you add both sums together, it comes to around $120, which is about £90. Surely the IRS won't send me to prison for such a paltry sum.

And if they owe me the money, then I'll pass on it to save me the time and effort.

Retirebefore50

Hi Ed.

The only boxes with any numbers in are box 2 Royalties ($99) and box 4 Federal Income Tax Withheld ($23). BTW, box 4 has emboldened borders, I don't know if that means anything. Anyhow, If you add both sums together, it comes to around $120, which is about £90. Surely the IRS won't send me to prison for such a paltry sum.

And if they owe me the money, then I'll pass on it to save me the time and effort.

You can try and claim the money back but for $23 it's not worth it. You would have to file a 1040NR and apply for an ITIN (unless you had an SSN or ITIN prior).

The advise above is correct, just ensure you file a W-8BEN (it expires every 3 years) and choose Art 12. Royalties are taxed in the UK not US per the treaty. Once complete, as stated above, they'll issue a 1042-S instead each year with no tax held. This form will arrive each year and you only need to care if they held too much tax.

Also the IRS won't be chasing you, you've overpaid them. Just ensure you include the income in the UK.