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davidmschrader
Returning Member

How do I account for Australia withholding tax...

I'm a photographer living in California.  I sell my work through various photo stock agencies.  One of those companies is Canva, which is located in Australia.  They have a tax treaty with the US that allows them to withhold taxes based on my yearly earnings .  They don't send me a 1099; they just send me a simple e-mail stating how much money I made and how much money was withheld.  For the latest period, they withheld $86.20; on their statement it's simply listed as "tax withheld."  I'm assuming they send this money to the IRS?  So how should I enter this using TurboTax?  The "Other Income" section?  But my main question is how can I get the credit for the tax paid?  Wouldn't it lower my tax amount due by $86.20?  Where/how do I enter this info using TurboTax?  Additionally, I'm a US citizen, and don't physically work in Australia.  The company has an "ABN" number; other than that, no other info other than basics like location, contact info, etc.  It's a small amount, but nowadays every dollar saved counts!  Thanks in advance to any advice given.

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2 Replies

How do I account for Australia withholding tax...

I believe the amount withheld would be reported under "Foreign Tax Paid".

davidmschrader
Returning Member

How do I account for Australia withholding tax...

Well, that sort of works, but it requires that I list the income as "personal income" as opposed to "business income," which it is.  Doing it this way lists my earnings as "wages," which they're not; they're royalties.  But it did reduce my tax amount by almost the same amount as was originally withheld, so I went ahead and listed it this way.  It's not a big amount, so even if I did it incorrectly, the affect on my overall return is negligible.

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