Wednesday, February 09, 2011

Conf 661: How To Fill Out US Tax Form IRS ITIN W7

UPDATE: The system has been relaxed! In the UK anyway, the embassy will accept phone requests for an EIN NUMBER. The below was my experience before EINs were being handed out. 

See also later post what to do when you get your EIN/ITIN Number.

YET ANOTHER UPDATE - APRIL 2013 It seems the system is becoming more confused and some writers who make enquiries are being steered back to ITINs. EIN numbers have always been for businesses, but authors working alone are sole traders and therefore can be eligible (but do you have to be registered self-employed and therefore change your National Insurance payouts?). Thankfully there are two excellent blogs to see you through all the possibilities and detailing the latest changes (apparently sometimes passports themselves are sent to Texas rather than certified photocopies). To read all about the ins and outs go to

Karen Inglis' blog

and

Catherine, Caffeinated

Further to my last post on US royalty laws and overseas authors I've been to the US Embassy in London and am now on the way to getting my paperwork sorted. If you don't have a tax exemption code to give US Amazon and US-based Smashwords (who make and distribute all your ebooks for Apple iBooks in the US and UK, Barnes & Noble etc), 30% of all your royalties will be deducted at source.

Not there yet but major hurdles, like what exactly you say on the form, overcome.

The first problem was getting inside the Embassy. As closely guarded as you'd imagine. I went up to the security entrance hut and tried to walk in but was swiftly expelled. I had to find a man on the pavement (sidewalk) standing at a table. He's the pre-security security man. Very friendly but told me it was closed and to come back at 2.

After enforced shopping on Oxford Street (Selfridges or Primark? guess which won), was back at 2 but the pre-security man had disappeared complete with his table. Panic. However, was allowed inside hut this time. After Airport-like security & going to wrong Reception found the IRS office on a lower ground floor. I don't know why but had imagined this as being like a post office, with counters and really unhelpful, officious staff. And I expected to have to wait for a long time, possibly hours. I do know why. This is the impression you get when you first set eyes on the form.

However not at all. In a small, comfortable room (with no queue at all) I met with a very friendly smiley biiiig American man who couldn't have been more helpful. 

Here is the form ITIN W7 for download.

Get here

You can fill it out online or print and fill in.

Now for the non-logical bits you have to fill in:

FORM REQUIREMENTS FOR UK CITIZENS

Reasons you are submitting Form tick TWO of the listed reasons:

a) Nonresident alien

AND

h) Other (see instructions) and WRITE IN: Exception 1(d) – ROYALTIES

Where it says “Additional information for a and f” in tiny letters underneath this list:

Enter treaty country: WRITE IN: UK*  and treaty article number: WRITE IN:  Article 12

Amendment further to Anne's comment below: *to be safe write United Kingdom  

IDENTIFICATION DOCUMENTS

If you send photocopies of your passport they must be certified photocopies by a US NOTARY, so local solicitors' certified copies or JPs' stamps are not enough.  'The stamp must be American' they said. If at all possible the easiest way is to take your passport, form and hand signed Smashwords letter into the Embassy in London (open Tues – Fri), they'll photocopy your passport for no fee and check you've filled out  the form correctly. If you have to send your original passport by post, send by recorded delivery and allow plenty of time, at least a month, for processing.

Under 6d Identification Documents:
Issue by: WRITE UK  No: WRITE THE PASSPORT NUMBER

SIGN & DATE the form.

The good news is there's no charge for this and the Embassy staff (once you get inside!) are very helpful.

Mine wasn't processed because I didn't have a letter from the US.

The letter proving that you are paid royalties in the USA MUST include the following:

LETTERHEAD
ORIGINAL HAND-SIGNED  SIGNATURE (no FAXes)
YOUR NAME
“royalties from USA paid in current tax year”
Don't complicate it by saying which tax year, just say “current tax year”. And make sure the words "from USA" are there or your form will be rejected.

As soon as you've accrued $10.00  or more royalties on Smashwords sales, Smashwords the great Mark Coker will send you an original signed letter with all the right requirements for free. They will also delay royalties until your forms are all processed.

There's another form after the ITIN W7, when I get to that will let you know.

This and much, much more information on creating and selling your own ebooks is available in my ebook:







Bye bye, thanks for visiting, come again soon.

7 comments:

Anne Brooke said...

Helpful hint! - Don't write "UK" as your form is likely to come back to you. Always do the whole thing - ie "United Kingdom"

:))

Anne
xxx

Stephanie Zia said...

Thanks Anne! Have amended. x

Judith Littardi said...

Hi Stephania,
I read your diary blog from February 9th, Conf. 661, with great interest, as we are also going through the process of filling out the dreaded W7 form. I'm just wondering how it all turned out for you in the end, I mean I'm assuming your ITIN number came through and that you've been able to get 'epublished' in the U.S. without having to pay tax over there. Also one stumbling block we are coming up against is that nobody seems to know how much the iBookstore's minimum earning's threshold is. Is this something you would know through your dealings with Smashwords? Anyway I have found your blogs highly informative and entertaining. I wish you great success for the future.

Judith L.

Stephanie Zia said...

Hi Judith,

Not daring to trust the post, I returned to the Embassy with my signed letter (it had to be in blue ink!, which Smashwords knew) and everything went through, am now waiting for my number to be posted to me. Then there's another form to send I think with that number on. I'm pretty sure it's $10 you have to earn before they'll do you a letter. Will update soon. Thanks for your good wishes! and the same to you. I hope you get it worked out, definitely worth it. xs

Judith L. said...

Hi Stephanie,

Firstly allow me to apologise for misspelling your name earlier. Secondly thank you so much for your reply. We have a letter that we've printed off from Createspace's (i.e. Amazon) website to take along to the embassy. However, from what you say I doubt this will suffice as it's just a PDF of a template letter, i.e. not an original signature and obviously in black ink. I'll give the IRS another call before we waste our time going down there. I forgot to mention earlier that my husband had already bought your book "How to Publish an eBook on a Budget" and found it really helpful. Thank you for your kind wishes, will continue to follow your progress and success, Jude x

Stephanie Zia said...

Thanks, Jude. Hope it's going well.

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