Some of the most popular posts on this blog are about the non-US self-publisher’s headache of receiving all your royalties as opposed to having 30% of them withheld for tax reasons. We’ve long established that you can either go the long way around and apply for an ITIN, or the take the shortest route from A to B—or 70% to 100%—and apply for an EIN instead. Once you have those magic numbers, whichever ones they may be, you send a W8 form to the tax compliance department of each company you self-publish with and sit back and wait for your considerably bigger cheques.
But what’s happens to the tax that’s already been withheld? What about the 30% that’s been skimmed off each and every US-based royalty payment you’ve thus far received? How do you get your US tax back?
Up until the beginning of this year withholdings in the year to date was automatically refunded when you submitted your W8 forms, but that’s not the case anymore. And if you were as sluggish as me in applying for your ITIN or EIN, you may even have had withholdings taken in the previous year. So how do you get your money back? The long way around is to apply to the IRS—file a US tax return.
But if you have an ITIN, you’ll have already experienced the joy that is IRS forms, and the foreign language that is their instructions for filling them out. If you live in Europe, you’ll also have to contend with the fact that the IRS seemingly has no clue how long mail takes to get across the Atlantic—they love to send notices warning you to get back them in 30 days or ELSE, but those notices don’t arrive until 29 days after they mailed them.
The IRS owed me about $500 from 2010, and to be honest $500 was not worth engaging in anymore correspondence with the IRS. (Yes, that’s how annoying it is. I got an ITIN, so I was all too familiar with them. Getting the ITIN took me something like eight months.) There was no way I was doing that.
Then I heard about Taxback.com, a company that, in basic terms, helps people get tax back from countries they don’t live in anymore, or countries they never lived in but from where they’ve earned money.
The company was founded by an Irishman and I’ve been dealing with the Irish office, but anyone can avail of their services from anywhere in the world, as far as I know. Everything is done via e-mail anyway so location is not an issue in that sense.
Taxback.com will be the first people to tell you that the service they offer is something you can do yourself, if you have the patience and like to fill out forms. But I don’t have any patience and I hate IRS forms, so I was more than happy to get someone else to do it.
There’s still some form-filling, but their Taxback.com‘s forms, and there’s only a couple of them. And you have someone you can call or e-mail whenever you have a question. And they’ll check everything is perfect before they get sent to the IRS and if it isn’t, they’ll fix it.
The real benefit to using their service is that if something goes wrong, they deal with it. Right about the time I should’ve been getting my refund cheque, I got a notice from the IRS saying that the ITIN I’d submitted to them wasn’t the ITIN I’d been assigned, and that I needed to submit more qualifying documents—and of course, this being the IRS and them not having a clue about mailing times between the US and Ireland, they’d given me 30 days to get the documents back of which only a couple hadn’t passed yet. But all I had to do was send TaxBack a scan of the letter and hey presto, the problem was fixed. They called the IRS on my behalf and proved to them that the mistake was in fact the fault of the IRS (they’d transposed some digits when entering the data from one of my forms), and within hours, my refund was back on track.
How much does this service cost? You’ve two options, I think: pay a flat free for them to prepare the documents and mail them yourself, or pay a percentage of your refund for them to take care of everything. I did the “take care of everything” one and personally, I thought it was worth penny. (Or cent.) They also have a no refund, no fee policy.
I e-mailed them scans of my forms in April, I think, and I received my refund a couple of weeks ago. I haven’t used them for this, but I believe that Taxback.com can also help you with ITINs, EINs and W8s.
You can find out more about Taxback.com here.