Withholding related question.

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Joined: Sat Mar 24, 2018 10:19 am

Withholding related question.

Post by frotec » Thu Jul 11, 2019 8:51 am

While my portfolio is primarily ETSs, I recently bought a few individual dividend stocks. I realized that last month I received dividends and there was a line item withholding on one of them. I have two quick questions please; Why was one stock doing the withholding? and How will I account for it at tax time?? Thanks in advance for your help.

Posts: 248
Joined: Sun Dec 26, 2010 7:29 pm
Location: Twinsburg Ohio

Re: Withholding related question.

Post by Ace1 » Thu Jul 11, 2019 10:16 am

Two possibilities....
1) Backup withholding which occurs because your tax id is not on file with the payor, or you elected withholding.
2) Foreign tax withholding, which occurs if the security is a foreign ( non US) company and that country requires a
fixed percent of tax to be withheld.

When you get the 1099 at the end of the year, one of the boxes will list the tax withheld. Depending on if
it is US or foreign will dictate where you take the credit for it on your tax return.


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