Starting the process of an American Tax Refund on gambling winnings
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The first step of a tax refund occurs when a winning amount is paid. It's important for a player to make sure the casino, as well as deducting the taxes, declares your identity correctly to the IRS. To do so, the casino fills up a 1042-S, Foreign Person’s Source Income Subject to Withholding. You can see this document with this link: : http://www.irs.gov/pub/irs-pdf/f1042s.pdf. It's very important at this point that you make sure every personal information on the form are exact., notably the amount withheld and the player identification. The tax rate should be 30%.
The second step is to contact a Canadian firm specialized in tax recovery from gaming gains to work for you. The main reason I recommend this approach is its simplicity. Indeed, from that point on, in exchange for a small percentage, a company like GamblingTaxes will take charge of every subsequent operation. Many players who decided to do it by themselves described to me the frustration and the long delays linked with navigating into the meanders of the IRS. From my experience, I believe the best way to maximize your return is to do business with a specialized firm; they will know how to get the most for a Canadian player.
Before proceeding with the tax return, the specialized accounting firm will start by requesting on your behalf your ITIN number, Individual Taxpayer Identification Number. The firm will also notarize your papers for this request. This number, given by the Internal Revenue Services (IRS) is used to identify any non American requesting a refund or having to pay taxes. Of course only people with one of these needs can apply for an ITIN. This number will follow the person the rest of his/her life so this procedure is only for the first time. The request is officially made using Form W-7; you can take a look at here with this link: http://www.irs.gov/pub/irs-pdf/fw7.pdf.
The refund claim will then be made using Form 1040NR, US Non Resident Alien Tax Return; a copy of it can be obtained here: http://www.irs.gov/pub/irs-pdf/f1040nr.pdf. Usually, this is the form that causes individuals the most problems. It is oftentimes wrongly filled or misused by neophytes. It is the Form responsible for the most delays and even rejects from the IRS. More reason to have a professional firm take care of it.
This article was intended to show you the administrative side of income tax returns on gaiming wins.