Tax information. International Students in the United States

Size: px

Start display at page:

Download "Tax information. International Students in the United States"

Jared Tyler
5 years ago
Views:

1 Tax information International Students in the United States Friday workshop for MC International 1

2 Why Should I File Tax Forms? To keep Legal in the United States If you ever apply for Permanent Residency (or maybe another visa type) the government may deny you if you did not file tax forms To get YOUR MONEY back! If you had any money withheld for taxes If you OWE any taxes and do not file, the US government can take money from your bank account charge you with a crime. 2

3 1098-T 1042-S INT 1099-MISC W-2 Forms to File with the IRS Forms you might receive Form8843 AND 1040NR-EZ/ 1040NR OR 1040/1040A/ 1040EZ Tax treaty benefit Lower Taxes 3

4 Forms you might receive 1098-T 1042-S 1099-INT 1099-MISC W-2 Tuition Statement Foreign Person s U.S. Source income Subject to Withholding Interest Income Miscellaneous non-wage Income Wage and Tax Statement 4

5 File with the IRS Form 8843 ALL F-1students MUST file 1040 NR-EZ Easy/simple income (wages from work or scholarship) 1040 NR Complex income with dependents or multiple types of income or investments 1040/1040A/1040EZ Tax Residents 5

File form 8843 with the IRS Form 8843 Statement for Exempt Individuals and Individuals With a Medical Condition to COUNT TIME in the U.S. It takes just a few minutes and counts how long you have been in the U.

6 File form 8843 with the IRS Form 8843 Statement for Exempt Individuals and Individuals With a Medical Condition to COUNT TIME in the U.S. It takes just a few minutes and counts how long you have been in the U.S. Fill in only Parts 1 and 3 DUE APRIL 17, 2018 Line by line instructions on International Students webpage under Current Students uments/international/8843-instructions_ii-8-18.pdf 6

7 Which 1040 form do I use if I have Income? Take the Substantial Presence Test unless you are an Exempt Individual. This test helps you know if you are a resident for tax purposes or not. Use the 1040 NR (Non Resident) IF You are in F-1 status (for up to 5 years) You are an Exempt individual during those 5 years Use the 1040 NOT NR only IF You are in F-1 status MORE than 5 years AND are in the US more than 31 days of the 6 th year and 183 days including 6 th year and 2 prior years You are NO LONGER an Exempt individual 7

8 Substantial Presence Test Substantial Presence Test To meet the test, the individual must be physically present in the US on at least: days during the current year, and days during the 3-year period that includes the current year and the 2 years immediately before that, counting: All the days you were present in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year 8

9 What if I Change Status? If you earn enough to pay taxes during the year you change status, you may be considered a Non-Resident, a Resident, or in Dual Status for tax purposes*. Other statuses have different times as Exempt Individuals, for example: J Exchange visitors file as Non Residents for up to 2 years B Visitor file as Resident after 183 days If Changing OUT of F-1 status Permanent Residents are Tax Residents as soon as the new status is approved Other Non-Immigrants see a tax advisor *See for examples 9

edu/_resourc es/documents/international/1040-nr-ezinstructions-2018-iii-8-18.

10 IRS forms 1040 NR and NR-EZ Form 1040NR-EZ U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents Instructions at es/documents/international/1040-nr-ezinstructions-2018-iii-8-18.pdf Form 1040NR U.S. Nonresident Alien Income Tax Return If you have dependents or have complicated income from many sources 10

11 Tax Residents File form /1040A/1040EZ 11

12 Tax treaty benefit A Tax Treaty is an agreement between your country and the United States to exempt or reduce your tax on some types of income. YOU must notify whoever withholds your taxes (such as bank or investment broker) of your treaty. For Banks: You can file a Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and show your passport to reduce or exempt you from taxes on your bank interest. 12

13 How to Get a Tax treaty benefit If your country has a Tax Treaty with the U.S. you must attach other claim forms to your U.S. tax return to claim your treaty benefits. The list of countries have tax treaties with the U.S. Claim Forms Form 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual Form W-9, Request for Taxpayer Identification Number and Certification 13

References https://www.irs.gov/individuals/international-taxpayers/alien-residency-examples https://www.irs.gov/individuals/international-taxpayers/claiming-tax-treaty- Benefits https://www.finance.

14 References Benefits International Student tax information pages

SUBJECT: Payments to Nonresident Aliens

Number 43 UNIVERSITY OF MAINE SYSTEM Issue 1 Page 1 of 2 Date 1/18/02 ADMINISTRATIVE PRACTICE LETTER INTRODUCTION SUBJECT: Payments to Nonresident Aliens United States tax law requires the University of