I just got slapped with a $148.70 "to adjust foreign withholding" in my Waterhouse/Ameritrade account. I also got a dividend and now I don't know where the heck I stand. Anyone else get this adjustment? Thanks.
My broker withheld 15% of my total dividend. This is for the payment of New Zealand foreign income tax, which will be paid for you by your broker. It will be reported on your year-end brokerage statement as foreign tax withheld. It will be fully deductable off of your US income tax. I believe that for up to $300 for a single tax payer and up to $600 for a couple filing jointly, you don't even need to fill out a special form; over that and you will need to. The cheapest versions of Turbo-tax and Tax-cut will take care of filling in the special form and printing it out for you. The bottom line is that you will get full credit for this income tax withheld off of your US income tax.