Everything about rental income earned by non residents in USA
There are many “non-resident aliens” in the USA who own a property in the country and earn rental income from it. It is a commonly known fact that any form of income that is earned within the geographical boundaries of the States has to be reported officially to the IRS (Internal Revenue Services), rental income is no exception to it. Whether it be the non-resident aliens, resident aliens or the citizens of the USA, the liability of paying taxes on rental income is applicable for all. However, the tax rules for the non-residents are a bit different from that of the others. Everything that you need to know about these rules are listed below.
As a general rule, the non-resident aliens who earn rental income on their US real estate property are liable to pay a 30% withholding tax which is imposed on the gross rental payment. This percentage of the total rental earnings is directly sent to the IRS either by the tenant himself or by the property manager of the owner.
It is to be noted that this 30% withholding payment rule is applicable only to those non-residents who are not regular taxpayers in the USA. That is, the person who does not file a tax return on a yearly basis because he does not work in the States is liable to make this payment. There are experts like Tax Consultants in Toronto that can be hired for further detailed information on this. .
This tax obligation can be easily reduced if the property owner files a tax return every year after receiving the rental income. By filing this tax return, the owner officially declares his total rental income and pays the appropriate tax that is levied on it.
Many agents who offer their services just like US tax consultants in Toronto, claim that there are ways through which this amount of payable tax can be reduced. The owner can show deductions like mortgage interest , property management costs, cleaning costs, and advertisements, etc These deductions are non-taxable and therefore, the actual amount of payable tax can be reduced.
Before filing a tax return, the non-resident property owners need to get the Individual Taxpayer ID Number (ITIN) if they do not have any.
If you wish to pay these taxes conveniently, you can avail the services of The Accounting & Tax Company. It helps individuals and businesses in filing personal and corporate taxes. The experienced professionals who work in the company are very helpful and considerate towards their clients. So, as a responsible citizen, you should pay your taxes on time.
