New to US stocks and wondering about withholding tax?

There is taxes of 30% withholding tax on dividend income on us stocks and I am wondering how does it work? Assume I get $100 from dividends with I receive $100 then pay $30 at the end of the year or do I receive $70 and need no worry about filing for the withdrawing tax

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Frankie Rappaport

22 Aug 2020

The broker withholds it for you, you get 70 USD.

The tax is not applied to capital gains when you sell the equity.

Also there is U.S. estate tax even when you're not a U.S. resident.

https://www.pwc.ch/en/insights/tax/us-estate-an...

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Lin Yun Heng

22 Aug 2020

Senior Analyst at Delphi

Yes the dividend WHT is 30% when it comes to US stock market and it applies to every single broker which are licensed to trade US equities. If you are looking at dividends, US market may not be the most optimal since US market characteristic is growth and capital gains. SG stock market may be more conducive when it comes to dividends if that is what you are looking for. I actually wrote articles on Growth portfolio and Dividend portfolio and I believe you can have a look to get a better idea about what to do. If you have any questions, do comment down below.

Cheers!

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Wrong Sean

22 Aug 2020

The dividend given to you will be net of WHT. For your example, you will get $70 only every time the...

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