08-26-2015, 08:08 AM
Inside or outside of an IRA you may or may not have to pay foreign taxes. Many countries have a reciprocal tax treaty with the U.S. and do not tax distributions to an IRA. For non treaty countries, the tax comes out whether in IRA or not. If taken out in an IRA, any foreign tax is non recoverable. For foreign holding in taxable accounts, the withholding amounts are all over the map. The following link has a list of rates, but the article is a little dated: http://www.dividend.com/dividend-educati...nd-stocks/. One other note, to get the favorable tax treaty rate on Canadian holdings, the investor must submit a verification form to the broker. At least in a taxable account foreign taxes can be applied to U.S. tax obligations for most of us, though it often requires filling out a separate form 1116.
If a person is fortunate enough to be in the upper tax bracket, dividends and long term capital gains are taxed at the 20% rate. For married filing jointly that starts at just under $465K, so no danger to me in this life time.
If a person is fortunate enough to be in the upper tax bracket, dividends and long term capital gains are taxed at the 20% rate. For married filing jointly that starts at just under $465K, so no danger to me in this life time.
Alex