IB requires applicants to select and provide answers to three security questions each selected from a separate pool of questions having varying degrees of complexity. In the event we receive a telephone inquiry involving sensitive information, prior to acknowledging or discussing any account specific information with the caller we will first look to verify that caller's identity. This is accomplished through a multi-tier security process, one tier which requires that the caller answer a randomly selected security question. The caller must provide an answer to the security question which exactly matches the answer we have on file. Otherwise, the request for information will be denied and a potential lock-down placed upon the account.
While applicants are required to provide IB with notification as to the amount they intend to fund their account with and the manner in which they fund the account in order to have the application considered for approval, there is no requirement that the funding actually take place prior to approval.
Applicants may nevertheless elect to remit funds via wire, check or electronic funds transfer (e.g., ACH, EFT) prior to receiving confirmation of account approval in an effort to accelerate commencement of any credit hold period. It should be noted, however, that deposits received prior to account approval are held in suspense and are not credited to the account nor eligible to accrue interest until the application has been approved. In the case where the applicant has authorized IB to fund the account via asset transfer (e.g., ACATS, ATON) from another broker, IB will not initiate the transfer until the application has been approved.
The security of your assets and personal information is of utmost concern to us and we are committed to taking the steps necessary to make certain you are protected from the moment you open up your account.
As IB LLC is a carrying broker domiciled in the U.S., it is required to report information and, in certain instances, make payment of withholding taxes to the U.S. tax authority, the Internal Revenue Service for all account holders. To certify oneself as a non-U.S. person, a Form W-8 is requested at the time of application and is required to be re-certified every three years thereafter. If IB does not receive the W-8 or the account holder fails to re-certify the W-8 in a timely manner, then the account holder is presumed to be a US person and, absent a W-9, may then be subject to back-up withholding taxes on interest, dividends and substitute payments in lieu, as well as gross proceeds.
By certifying yourself as a non-U.S. person through a properly completed W-8, your U.S. withholding is limited to dividends issued by US corporations. Note that virtually all countries apply withholding taxes when local companies seek to distribute dividends to externally based shareholders (whether those shareholders are corporate or not). The rate at which IB is obligated to withhold for a given payment depends largely upon whether there is a tax treaty in place between the country where the dividend paying country is based and the country of residence of the dividend recipient.
The Registration Confirmation Number is a random numeric code sent to the applicant's email address which serves to register the email address as valid once the number has been retrieved and entered into the application. Failure to receive the email containing this number can generally be attributed to one of two causes:
3 simple questions can help you choose a tax certification form. Read the questions and select the form. For more detailed help, see Tax Information & Reporting.
|• U.S. Citizen||• U.S. Business or Organization|
|• U.S. Green Card Holder||• U.S. Domestic Trust|
|• U.S. Legal Resident|
If the answer is YES, complete Form W-9
If the answer is NO, go to # 2.
|• H-1B Visa Holder||• TN Visa Holder
|• O-1 Visa Holder|
If the answer is YES, find your status by the "substantial presence test." See More U.S. Legal Resident Info
If the answer is NO, go to # 3.
*Question does Not apply to U.S. Citizens/Entities or Green Card Holders
|• Permanent Home Outside of U.S||• Entity Formed Outside of U.S.|
|•Business or Organization formed outside of U.S.|
If the answer is YES, complete Form W-8 (U.S. Citizens, Green Card Holders, and Entities still complete the W-9.)
NOT SURE because you work, live, or study in the U.S. then, see More U.S. Legal Resident Info
Disclaimer: IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax adviser or refer to the U.S. Internal Revenue Service.
Filling out a tax certification form is required to open an IB account. The forms confirm your tax status in relation to the United States. Information provided by you may lower or exempt the U.S. tax withholding on your account.
This article will help you to:
►Choose the correct certification form ►Find your tax treaty benefits
►Fill out and submit your form online ►Answer tax certification questions
Which Form Do You Pick?
Tax Treaty Benefits
Management of account activity differs for each account type. IB is a U.S. broker and must follow U.S. guidelines. 3 simple questions help you choose the right form
Some countries have a tax treaty with the U.S. Find out if you benefit from a lower tax-withholding rate. Tax Treaty Benefit Info
Filling Out The Form
Tax Certification – FAQ’s
|The certification form is direct. Supply basic account information on the true owner of the assets or entity. Select W-9 Instructions or W-8 Instructions for help.||Seek professional advice for tax questions. These common questions and answers may help you make an informed decision. Tax Certification - Frequently Asked Questions|
Disclaimer: IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax advisor or refer to the U.S. Internal Revenue Service.
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This information is for general educational purposes only. Individuals should consult with their financial adviser or legal counsel to determine how rollover regulations affect their unique situations.
Generally, an investor changing jobs or leaving the workforce may utilize either a Direct Rollover election to continue their retirement savings outside of their employer-sponsored retirement plan. Assets distributed directly to your IRA from the retirement plan may qualify as a Direct Rollover.
What is a Direct Rollover?
The Direct Rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan, including an IRA. The contribution to the IRA is called a rollover contribution. The Direct Rollover method transfers the assets directly from the retirement plan (and not to the IRA owner) into the investor's IRA, avoiding the 20% mandatory IRS withholding. This option to transfer retirement assets has no age limitations.
Eligible retirement plans include:
Who do you contact first?
Contact your retirement plan administrator or the human resources office for eligibility and requirements. The plan administrator is required to provide a reasonable direct method of asset transfer. Completion of an IRA Rollover Form provided by the administrator may be required, in some cases. In other cases, the plan accepts an IRA Rollover Form supplied by your IRA's broker. Therefore, it is important to check with the plan administrator.
Initiating your Direct Rollover through IB
For those transfers that require a broker-supplied IRA Rollover Form, Interactive Brokers provides a convenient IRA Rollover Form. Interactive Brokers will forward the request to the plan administrator or broker for processing. Funds may be transferred by either wire transfer or check directly to Interactive Brokers.
Before accepting an IRA rollover transaction into an IRA, we require that you review your eligibility for the rollover and certify your understanding of the rollover rules and conditions. The IRA Rollover Form includes the Rollover Form and an IRA Rollover Certification Form.
The Fund Transfers page within the Account Management lets you notify IB of an IRA Rollover deposit of funds into your account. Select the Funding tab in the header link and choose Deposit Funds in the Transaction list. In the Method list, select Direct Rollover. Complete, sign, and return both forms to the Interactive Brokers address on the form.
Contact Customer Service with any additional questions.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this article was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
All applicants are required to specify their country of legal residency during the initial stage of the application process. Based upon the response provided, the applicant will automatically be provided with the appropriate application forms, agreements and disclosures specific to the IB entity through which the account will be maintained upon approval (e.g., IB LLC, IB Canada, IB UK, IB India, IB Japan).
It's important to note that the IB entity to which an account is assigned is not subject to client discretion but rather determined by regulation and is a function of an individual's stated country of legal residency or, in the case of an entity, its country of formation.