International Students: File Taxes Easily With Turbotax

International students in the US can use TurboTax to file their taxes, but only if they are filing as residents. TurboTax is a service for US residents and does not support non-resident forms like the 1040NR or NRA forms. F1 students cannot file as tax residents for the first five calendar years unless they have been in the US for at least one day over five calendar years with an F/J/M/Q status. Sprintax, the non-resident partner of TurboTax, is a popular alternative for international students to file their taxes.

F-1 students and tax returns

International students on F-1 visas are considered nonresident aliens for tax purposes and must pay US taxes on their income. This includes any income from an OPT (Optional Practical Training) program, which allows international students to work in the US after graduation.

As a nonresident alien, you will need to file a federal tax return (Form 1040-NR) to assess your federal income and taxes. This is the case even if you did not earn any money during your time in the US, in which case you will need to file Form 8843 with the IRS. You may also be required to file a state tax return and pay state income tax, depending on the state. Nine US states don't have any tax-filing requirements.

It's important to accurately complete these forms as they can impact future Green Card and visa applications. While TurboTax is the biggest online tax preparation service in the US, it is only for US residents. Filing with TurboTax as an F-1 student will mean your tax return is inaccurate and you may be subject to fines and penalties. Instead, Sprintax, the nonresident partner of TurboTax, is the go-to resource for international students and nonresidents. With Sprintax, you can easily prepare a fully compliant 1040-NR (nonresident tax return) and Form 8843.

F-1 students are exempt from social security and Medicare taxes for up to five years from their date of arrival in the US. However, if you have been in the US for more than five calendar years, you may become a resident alien for tax purposes and be liable for these taxes.

Non-resident tax returns

International students in the US on an F-1 visa are taxed in the same way as nonresident aliens for US federal income tax purposes. This means that they are taxed only on certain sources of income, such as taxable scholarships or income from investments.

As a nonresident alien, you are required to pay income taxes, but you are taxed differently from resident aliens. The IRS uses two tests to determine your alien status: the green card test and the substantial presence test. If you meet the requirements of either of these tests, you are considered a resident alien for tax purposes; otherwise, you are treated as a non-resident alien.

TurboTax is a service for US residents, and by using it, non-resident aliens will be filing as residents. This means that their tax return will be inaccurate and they may be subject to fines and penalties. Instead, Sprintax is the nonresident partner of choice for TurboTax and is the recommended software for non-resident aliens to use to prepare their tax returns. With Sprintax, you can easily prepare a fully compliant 1040NR (nonresident tax return) and form 8843 tax documents.

In the year of transition between being a nonresident and a resident for tax purposes, you are generally considered a Dual-Status Taxpayer. A Dual-Status Taxpayer files two tax returns for the year—one return for the portion of the year when considered a nonresident, and another return for the portion of the year considered a resident.

Taxable scholarships

As an international student in the US, you are taxed in the same way as a nonresident alien for federal income tax purposes. This means that you will be taxed only on certain sources of US income, such as wages from US sources or investment income.

If you are an international student who has received a taxable scholarship, such as a stipend or housing allowance, you will receive a 1042-S form from your school or institution. This scholarship income will be taxed as non-qualified expenses, such as room and board, and will need to be reported in your taxable income.

It is important to note that scholarships are generally tax-free if they are used for "qualified education expenses" at "qualified educational institutions". This includes any funds received to pay for tuition, school fees, books, or any supplies required for courses at your school. To qualify for this tax exemption, you must also be a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance.

If any of the scholarship funds count as taxable income, you should receive a Form W-2 from your scholarship provider. This form will indicate the taxable amount that you need to claim on your taxes. If you do not receive this form, it is recommended to reach out to your scholarship provider to inquire about the taxable amount.

While TurboTax is a popular option for US residents to prepare their taxes, it is not the appropriate platform for nonresident international students. Instead, Sprintax, the nonresident partner of TurboTax, is the recommended software for international students to prepare their tax returns accurately and avoid potential fines and penalties.

Income from investments

As an international student in the US, you are required to pay tax on any US-sourced income. This includes income from investments. If you have earned income from investments, you will need to report it when filing your US nonresident tax return (1040-NR).

To correctly file your taxes, you will need to gather some important documents. These include your Social Security Number or Tax Identification Number (ITIN), and your W-2 form. If you received a taxable scholarship, such as a stipend or housing allowance, you will also receive a 1042-S form from your school or institution. This form is also issued to nonresidents receiving certain types of income, including independent contractor payments, royalties, prizes, and award payments.

If you have earned income from investments, you will need a 1099 form when filing your tax return. Your investment broker or bank will provide this form. It is important to note that TurboTax is a service for US residents, and you will need to file as a nonresident. Therefore, you cannot use TurboTax for your tax filing. Instead, you can use Sprintax, the nonresident tax-filing partner of TurboTax, to prepare your nonresident tax return. By creating a Sprintax account, you can easily prepare a fully compliant 1040-NR (nonresident tax return) and Form 8843. Sprintax will help you claim your maximum legal tax refund and ensure full IRS tax compliance.

Tax refunds

International students on F-1 visas who are temporarily present in the US are exempt from FICA taxes on wages they are paid for services performed within the country. The Internal Revenue Code grants an exemption from social security and Medicare taxes to nonimmigrant students on F-1 status. The exemption period of the F-1 visa is five years from the date of their arrival in the US.

International students can benefit from a tax treaty with their home country. The US has income tax treaties with 65 countries. Under these treaties, residents (not necessarily citizens) of foreign countries may be eligible to be taxed at a reduced rate or be exempt from US taxes. These reduced rates and exemptions vary among countries and specific items of income. In certain cases, F-1 students could be able to claim a tax treaty, which can reduce or fully exempt their income from taxes. In such cases, the overpaid amount will be refunded to the F-1 student.

An F-1 student could be able to claim a tax refund on their scholarship if it is completely or partially covered by a tax treaty. If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, the student should contact their employer to request a refund. If the student is unable to get a full refund of the amount from their employer, they can file a claim for a refund.

If the amount of tax deducted from an F-1 student's payments during the tax year is more than the tax shown on their 1040NR, then they will be due a refund. Otherwise, they will be required to pay their US tax liabilities. It is important to note that each individual state has its own tax system and tax regulations, imposing different residency and filing requirements under which foreign students may have to file a state tax return and pay state income tax even when no federal return is due.

Sprintax is the nonresident partner of choice for TurboTax and the only online federal and state self-prep tax software for nonresidents in the US. By creating a Sprintax account, international students can easily prepare a fully compliant 1040NR (nonresident tax return) and Form 8843 tax documents. Sprintax will also help students claim their maximum legal tax refund.

Frequently asked questions