What do I have to know about taxes before I open an Ameritrade account?

Question

I'm a Mexican citizen and I would like to know where can I find
very descriptive and puntual information about the way I should pay taxes when investing using Ameritrade. Are there any special rules I should follow since I'm not a U.S. citizen and I will trade with american stocks?

Answer 1

That will depend upon whether you are a US resident for tax purposes or not.

If you are a US resident you'll pay taxes on any dividends paid even if you do not take them in cash. There may also be capital gains if you invest in mutual funds that will be taxable even if you do not remove the funds. Of course, you'll pay capital gains taxes on the gains on any securities that you do sell. You will have to claim this income on your US tax return.

If you are NOT a US resident, Ameritrade will withhold 30% source tax on any gains, income, interest, dividends, etc. that your account earns. Again this will apply whether you withdraw the funds or not. You will not need to file a tax return though as the 30% source tax will be your entire tax liability.