I am an American citizen but have never lived in the US. Do I need to fill a W8-BEN or a W-9?
Yes, you do.  You also need to file a tax return every year, and if you have more than $50k of total savings you need to declare this every year. "Your employer can require a W8-BEN or W-9 if you are a contractor, and in some special cases.  I believe this bank managing your stock options can as well; it's to prove you don't have ""foreign status"".  See the IRS's W-9 instructions for details."
You need an accountant and/or a lawyer who is familiar with the US tax code and the rules in South Korea (assuming from your tag). As the interest will be money generated in the US, you could be required to withhold some of the interest and remit it to the IRS (I believe 30% withholding rate). Since South Korea is a treaty country, your friend can complete and sign a form W8-BEN and give it to you, so you may withhold a lower amount. Your friend would need to file a return if too much was withheld. They may also get taxed in South Korea. There are probably rules in South Korea about minimum interest that must be charged, similar to Applicable Federal Rates for the US, so check with your accountant or lawyer for this. If you craft it correctly, you will be able to have a loan as a mortgage (with the house properly secured), which then would allow you to deduct mortgage interest rates from your return. As far as I am aware, there is no maximum amount for loans. "I am a female that works for a photo studio in berlin. I work ""part time"" (as in, I started at four hours per day and now I can work up to 8 if there is enough work). I make 8 euro per hour (not a lot but I don't speak fluent German and I scan photos), I have health insurance, I have sick and vacation time (24 days).  I am married to a German with a full time job so, of course, I have it better. However, if we didn't make enough money you can go and apply to get help from the government. My husband said they would give him at least 300euro per month.  Trick is that since I am a US citizen and looking for a permanent visa in three years they check to make sure you haven't gotten any government aid. They don't want to support more people that can't or don't want to work.  That being said my mother-in-law cannot work due to medical reasons and she lives very comfortably in a good apartment.  Our last apartment was a studio/one room apartment and we paid 230 euro per month. Even making the money I do without my husband I could afford the basics.  Even now we pay 57 euro for electricity. About 20 euro a month for our phones. 20 euro a month for internet.  It is way less expensive than the USA. My mom pays about $90 per month (my aunt sometimes has $1,000 electricity bills). Water is another $30. Cellphone another $60, cable and internet another $120.   I would say that living in the USA is far more expensive.  Edit: to put it very simply. I used to make on my own in the USA about what my husband and I both make, combined, in Germany. In the USA I could barely make ends meet. I lived with my mom and sister. Paid as little rent as I could, barely had enough for food. I had a good job! I was lucky to have health insurance but it was still really expensive to go to the doctor.  Here, in berlin, we have a large apartment in a nice neighborhood. With paying rent and all of our must haves every month we have over 500 euro left. That is pretty good. In the USA I was lucky if I had $20 by the end of the pay period." The I-9 form is required because you are working. It is kept by the employer as proof that you have the proper documents to work. If the government was to inspect their records they can be fined if they don't have those document, in fact they have to keep them for several years after your employment is done. A w-4 form is a federal tax form. There also was probably a state version of the form.  When you completed the w-4 it is used by your employer to determine how much in taxes need to be withheld. Employers don't know your tax situation. Even though you are on work study, you still could have made enough money over the summer to pay taxes. But if this is your only job, and you will not make enough money to have to pay taxes, you can fill out the form as exempt. That means that last year you didn't make enough money to have to pay taxes, and you don't expect to make enough to have to pay taxes this year. If you are exempt, no federal income tax will be withheld. They might still withhold for social security and medicare. The state w-4 can also be used to be exempt from state taxes. If they withhold any income taxes you have to file one of the 1040 tax forms to get that income tax money back. You will have to do so for the state income tax withholding.  A note about social security and medicare. If you have an on campus job, at the campus you attend, during the school year; they don't withhold money for social security and medicare. That law applies to students on work study jobs, and on non-work-study jobs. for single dependents the federal threshold where you must file is: > You must file a return if any of the following apply. Your gross income was more than the larger of— a. $1,000, or b. Your earned income (up to $5,850) plus $350. Do I need to declare it to IRS? The account? No. You do need to file a form W8-BEN with the bank though and make sure you maintain the correct information on it (it has your address there, so if you move - update it). Your account may be frozen until the form is provided, especially if it has activity on it. The 2-nd and 3-rd scenario would come as a result of some freelancing   activity done while I am out of the US (definitely would qualify for   Non-Resident Alien status). This you do have to report to the IRS. I'm guessing the payer is in the US, and would not know that you're a foreigner. In this case you're liable for taxes (if the payer knows you're a foreigner - they must withhold the taxes on your behalf). The payer will report payments to the IRS, so you have to submit your own tax return for a match. If there's activity on your account that might be suspicious, it will be reported to money laundering unit in the US Treasury Department, that may come after you through the treaties the US might have with your home country (tax treaty, extradition treaty, etc). I get this argument for the citizenship thing too. It's being unpatriotic that I shouldn't want to file or pay taxes on money I earn oustide of the USA that stays in banks outside of the USA and won't be spent in the USA or even ever converted to dollars.  Even if you don't owe anything, it's pretty much impossible to file without professional help once you get assets involved (I'm talking like a retirment account, a house, stocks, etc... Not super rich people stuff) so no matter what you have to pay an accountant that specializes in international taxes and that's not all that cheap either.  If I weren't emotionally attached to my citizenship and identity, I would have renounced already and it looks like it's getting worse with all kinds of FATCA nonsense. Thanks for the public education, US but it looks like I may have to self exclude myself from ever mvoing back because of stupid bullshit. You're not physically present in the US, you're not a US citizen, you're not a green card holder, and you don't have a business that is registered in the US - US laws do not apply to you. You're not in any way under the US jurisdiction.  Effectively connected income is income effectively connected to your business in the US. You're not in the US, so there's nothing to effectively connect your income to. Quote from the link: You usually are considered to be engaged in a U.S. trade or business   when you perform personal services in the United States. You ask: If I form an LLC or C corp am I liable for this withholding tax? If you form a legal entity in a US jurisdiction - then that entity becomes subjected to that jurisdiction. If you're physically present in the US - then ECI may become an issue, and you also may become a resident based on the length of your stay. Forms 1099 and W2 are mutually exclusive. Employers file both, not the employees. 1099 is filed for contractors, W2 is filed for employees. These terms are defined in the tax code, and you may very well be employee, even though your employer pays you as a contractor and issues 1099. You may complain to the IRS if this is the case, and have them explain the difference to the employer (at the employer's expense, through fines and penalties). Employers usually do this to avoid providing benefits (and by the way also avoid paying payroll taxes). If you're working as a contractor, lets check your follow-up questions: where do i pay my taxes on my hourly that means does the IRS have a   payment center for the tax i pay. If you're an independent contractor (1099), you're supposed to pay your own taxes on a quarterly basis using the form 1040-ES. Check this page for more information on your quarterly payments and follow the links. If you're a salaried employee elsewhere (i.e.: receive W2, from a different employer), then instead of doing the quarterly estimates you can adjust your salary withholding at that other place of work to cover for your additional income. To do that you submit an updated form W4 there, check with the payroll department on details. Is this a hobby tax No such thing, hobby income is taxed as ordinary income. The difference is that hobby cannot be at loss, while regular business activity can. If you're a contractor, it is likely that you're not working at loss, so it is irrelevant. what tax do i pay the city? does this require a sole proprietor   license? This really depends on your local laws and the type of work you're doing and where you're doing it. Most likely, if you're working from your employer's office, you don't need any business license from the city (unless you have to be licensed to do the job). If you're working from home, you might need a license, check with the local government. These are very general answers to very general questions. You should seek a proper advice from a licensed tax adviser (EA/CPA licensed in your state) for your specific case. "Everything is fine.  If line 77 from last year is empty, you should leave this question blank. You made estimated tax payments in 2015.  But line 77 relates to a different way to pay the IRS.  When you filed your 2014 taxes, if you were owed a refund, and you expected to owe the IRS money for 2015, line 77 lets you say ""Hey IRS, instead of sending me a refund for 2014, just keep the money and apply it to my 2015 taxes.""  You can also ask them to keep a specified amount and refund the rest.  Either way this is completely optional. It sounds like you didn't do that, so you don't fill in anything here.  The software should ask you in a different question about your estimated tax payments."