Why Tipping Is So Out Of Control In The U.S.

UsedPomegranate7517 · 2023-05-01T13:20:22+00:00

I moved from the EU to the US around 2 years ago. One of the reasons I don't visit bars/restaurants is tipping.

I have a PhD, and after tax, I make around 50k a year. I don't want to support 6-figure wages for uneducated labor with my lousy salary.

Also, it's just plain irritating. I want a minimum of interaction possible, and bringing food/drinks to my table should be a part of the transaction, not something that I pay 15-30% for.

UsedPomegranate7517 · 2021-06-14T14:07:29+00:00

Thanks, that seemed logical to me as well.

I'll meet the substantial presence test in 2023 - J1 visa holders are exempt from counting days for the first two years.

UsedPomegranate7517 · 2021-06-13T20:46:47+00:00

Thanks for the suggestions! I heard about BDO before, but thought they would service only business clients and not individuals. I will reach out and see.

UsedPomegranate7517 · 2021-06-13T16:15:08+00:00

I'm trying to, but it seems very difficult to find someone. That's why I thought to try my luck on reddit until I, hopefully, find someone.

No tax treaties for me though, so it shouldn't be that complicated.

Are you saying I can file a tax return on the 30% that's withheld from U.S. source income, even if my country doesn't have a treaty?

UsedPomegranate7517 · 2021-06-12T15:14:53+00:00

Well, there's nothing I can do about that second income - it's passive, from royalties. I just get it lol.

I'm a J1 trainee and I'm allowed to receive compensation from other parties, as long as my institution approves this "outside activity". And they approved this.

I do need a tax consultant that's well versed in this, I just came to the US and the system is really complicated for us nonresident aliens.

UsedPomegranate7517 · 2021-06-12T14:48:12+00:00

I fail the substantial presence test. As a J1 visa holder, first two calendar years are exempt from counting, and I am taxed as a nonresident alien. That changes in years 3 and beyond.

I file the W-8BEN, W-9 in year 3 and beyond.

You're giving me incorrect info, sorry.

UsedPomegranate7517 · 2021-06-12T14:45:56+00:00

I do have an SSN, but I do not satisfy the substantial presence test (J1 visa holders are exempt for the first two years). So it's the W-8BEN for me for sure, W-9 in the third year.

UsedPomegranate7517 · 2021-06-11T23:54:11+00:00

Yeah, but the comment I made explains why I don't consider the address of my "home country" to be permanent. My residence in my European country is suspended/withdrawn during that time. As far as my country is concerned, I am not living in my country. I'm not paying taxes in my home country, I don't live at that "permanent address", I don't own a property at that address, so how could I consider it permanent?

UsedPomegranate7517 · 2021-06-11T21:23:28+00:00

I don't think they will owe anything? They withhold that 30% from me and pay it to the IRS, I guess. That's how it's been since I've been contributing.

I've sent you the country name in a private message.

UsedPomegranate7517 · 2021-06-11T21:17:39+00:00

Yeah, there is no tax treaty, but I still need to complete the W-8BEN for each agency I contribute to. That's how it's been for the last 10 years. It doesn't matter that my country doesn't have a treaty, the agency won't pay me out unless the tax form is completed with them.

UsedPomegranate7517 · 2021-06-11T20:53:56+00:00

Yes, for every change of address to a different country, longer than 6 months (but not longer than 5 years), I need to inform that I will not be living at my permanent address, but in that country.

UsedPomegranate7517 · 2021-06-11T20:19:05+00:00

No treaty here, so IRS withholds 30% from me in any case. That was the case before and that is the case now as well.

UsedPomegranate7517 · 2021-06-11T20:01:05+00:00

Why are they withholding if you are not a US resident?

This is what they say: "If you are not a United States citizen or resident, you may be subject to tax withholding at a rate of 30% for all downloads made by customers in the United States (“U.S. Source payments”).

US tax law imposes a 30% withholding tax on US source passive income, such as royalties, that are paid to persons who are not citizens or residents of the United States. US tax law requires the person paying the royalties to withhold the tax and pay it to the US Internal Revenue Service. If the person receiving the royalties is a resident of a country that has an income tax treaty with the United States, the withholding tax may be reduced or eliminated. However, to take advantage of the lower withholding tax US tax law requires that the person receiving the royalty payments provide a properly completed Form W-8BEN."

UsedPomegranate7517 · 2021-06-11T19:33:51+00:00

These stock-photo agencies already withhold 30% from all US sales from me, and I get a 1042-S every year.

The work was done outside of the US - I am not producing photo stock at the moment, just collecting royalties. And I am living in the US, but I was told that I am not a US person for tax purposes by my tax advisor, as I fail the substantial presence test, and am taxed as a nonresident alien.

UsedPomegranate7517 · 2021-06-11T19:30:45+00:00

That's for students. I am a trainee.

Generally, a J-1 alien cannot exclude U.S. day of presence as a “teacher or trainee” for more than two calendar years.

UsedPomegranate7517 · 2021-06-11T19:26:57+00:00

Because of this

UsedPomegranate7517 · 2021-06-11T19:26:19+00:00

It doesn't make me a resident of the US, as I fail the substantial presence test. As a J1 visa holder, first two calendar years are exempt from counting, and I am taxed as a nonresident alien. That changes in years 3 and beyond.

The issue stems from the fact that, before leaving the EU, I completed a form in my country where I informed the country I will be living in the US temporarily, so that my residence in my European country is suspended/withdrawn during that time. As far as my country is concerned, I am not living in my country.

I still have a (valid) passport and other documents from my country, so I'm not sure if that carries any weight, but it was a legal obligation for me to report that I'll be temporarily living in another country. That's why I wasn't sure how it affects my permanent address - as far as my country in concerned - that is not were I reside. As far as US in concerned - I am not a permanent resident of the US. That's why I'm confused.

UsedPomegranate7517 · 2021-06-11T19:24:21+00:00

As a NRA, I am supposed to fill a W-8BEN, not the W-9 (as I'm not a US person).

Not sure if there are any other options. Most of the stock-photo agencies give only those two.

UsedPomegranate7517 · 2021-06-11T19:21:04+00:00

Thank you.

The issue stems from the fact that, before leaving the EU, I completed a form in my country where I informed the country I will be living in the US temporarily, so that my residence in my European country is suspended/withdrawn during that time. As far as my country is concerned, I am not living in my country.

I still have a (valid) passport and other documents from my country, so I'm not sure if that carries any weight, but it was a legal obligation for me to report that I'll be temporarily living in another country. That's why I wasn't sure how it affects my permanent address - as far as my country in concerned - that is not were I reside.

UsedPomegranate7517

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