Each and every international student residing in the USA has to file their tax returns every year. The last date for filing tax returns for 2019 in the United States is on or before the 15th of April. The money made in the United States while you are an international student is subject to taxation.
Unless you understand clearly how to file for tax returns in the USA it would be best to seek professional help to get it prepared properly and file your tax returns in time. In this article, we discuss the formalities of tax filing in the USA for international students.
Tax Filing In The USA For International Students – Quick Facts
- The last date for submission for 2019 is on or before April 15th
- Need to file Form 8843 separately
- Even if one didn’t earn any money in the USA, all students must file form 8843 to stay legally under F, J, M & Q visas
Who Is An International Student In The USA?
The F1 visa is for students pursuing academic studies and it is the most common of all international student visas in the United States. This visa status is essential to legitimize the presence of an international student in the US and decides on the type of employment a student is allowed to pursue.
The entire student experience of an international student in the US is overseen using this visa. One of the major things that students should be aware of when it comes to their visa status is filing for tax returns.
Foreign students who wish to do practical training do so under the J1 Visa and the M1 Visa is used by students who pursue non-academic or vocational programs.
The American Tax System: An Overview
People residing in the U.S, whether they are American or from other nations, are expected to pay taxes both to the federal and state government.
The Internal Revenue Service (IRS) is the agency through which the entire process of taxation takes place in the USA. When you earn money in America a small portion of it is deducted automatically and sent to the government directly.
The details of how much money was paid to each individual and the amount paid to the government by an organization are submitted to the authorities during the beginning of every year.
You need to report to the government all your sources of income and this is the purpose of filing tax returns. This helps the authorities understand how much you’ve paid, how much you still owe to the government, and in the situation where you qualify for deductions and exemptions you can claim that as well.
The process calculates the total amount you have to pay. You have to pay the difference if you haven’t paid enough or you can claim a refund if you’ve paid more than required.
Tax Filing In The USA For International Students – Do You Need To File Tax?
Yes, an international student has to. As a condition of your student visa, all international students are required to file a tax return. However, not all of you will have to pay taxes to the U.S government.
Considering international students in the U.S are entitled to various exemptions and benefits most of the students wouldn’t have to pay anything. You could also receive a check for a refund in case you’ve paid more than what is required as taxes to the government.
Why Should You File For A Tax Return?
According to the law in the United States, international students along with their dependents including children who were in the U.S the previous year have to file for their tax return. Even though the process may seem difficult there are several benefits associated to it. The following are some of them.
- Taxation of your income worldwide can be protected
- You could be eligible for a tax refund
- Filing for a tax return is essential to fulfilling all the obligations related to your student visa in the U.S and to be considered legal.
Tax Filing In The USA For International Students – The Forms You Need To Submit
- All international students in the U.S and their dependents need to submit Form 8843 separately.
- International students may also have to submit Form 1040NR-EZ along with Form 8843 in case they’ve received income in the previous calendar year in the United States.
Tax Filing In The USA For International Students – Ways To Submit The Forms
A Professional Tax Adviser
The best way to file for your income tax returns in the U.S is to seek the service of a professional tax adviser. He/she can ensure that the procedure is carried out flawlessly and help you get a full refund in the situation where you are unaware of your eligibility.
Expert help would also prove to be beneficial when the tax return process for the international students are more complicated or you also have to take care of your dependents’ tax proceedings as well.
File It On Your Own
The forms for filing tax returns can be found online on the Internal Revenue Services (IRS) website. International students can download the form and take printouts.
You can fill in the form by yourself and fill in separate forms for your dependents if there are any and submit it directly to the IRS to get it processed. Make sure you understand all the requirements and know how to fill in the form correctly.
Do You Need To Pay Taxes On The Income From Your Native Land?
An International student who is a non-resident alien (A person who is neither a citizen nor a native of the USA and has not passed the test for a green card or substantial presence test) who has properly filed for a tax return in the U.S are exempted from paying taxes on the income from his/her home country.
Is A Student Considered A Non-Resident When It Comes To Paying Taxes?
An international student cannot appear for the Substantial Presence Test during the first five years of his stay in the U.S. After the period of five years the student can appear for this test which determines if a person has stayed long enough in the U.S to be considered a resident. Until then the international student is considered as a non-resident when it comes to filing for tax returns.
Tax Filing In The USA For International Students – Things Required Before Filing The Returns
- Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN)
- In case you don’t have any of the above mentioned you’ll have to apply for one by filling out Form W-7
- If you’ve earned income in the US. you’ll have to fill in additional form or forms depending on the income you’ve earned. The forms that you might need are Form 1042, Form 1099, and Form W-2. These forms will be sent to the international student through mail either by the employer or by the University.
What Is Considered As A USA Source Income?
- A scholarship from an organization in the United States of America
- Interest made from the money in a bank account in the U.S
- Wages from an employer in the U.S
Tax Filing In The USA For International Students – Claiming A Tax Treaty Benefit
For an international student to claim a tax treaty benefit the following criteria need to be met:
- You should be on F-1 or J-1 Visa
- You should have been a resident of one of the countries listed by the United States before coming to this country as a student.
- You’ve had a U.S source income
- You should be a non-resident alien (tax purpose)
Tax Filing In The USA For International Students – Steps To File Returns
- An international student needs to confirm the following:
- Residential status
- Whether he/she has an ITIN or SSN
- U.S. source income
- Collect the documents from the income sources in the U.S
- Download all the forms required from the IRS website
- Fill in all the forms (including Form W-2, Form 1042 and Form 1099 if required) correctly following the instructions.
- Make printouts and mail all the forms along with the cheque directly to the IRS
- In case you owe additional taxes to the government attach a cheque for the amount required along with the documents.
- All international students in the U.S have to file for tax returns by mail as the IRS do not allow electronic filing for non-resident aliens.
Besides submitting the federal tax forms, depending on the state in which the international student attends the University he/she may have to fill out and submit state tax forms as well.
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