Janice Lozano
International students in the US have an obligation to file taxes once per year for their first five years in the country. The US tax system is a pay-as-you-go system, meaning there are usually automatic tax withholdings from your paycheck, stipend, or financial aid. To file taxes, international students will need to determine their federal tax filing status: nonresident tax filer or resident tax filer. This status determines how they are taxed and which forms they need to fill out. F-1 and J-1 students are considered nonresident tax filers for their first five calendar years in the US. To accurately determine federal tax filing status, students can refer to the IRS website, Sprintax's blog page, or create a Sprintax account. Additionally, some international students and scholars will also need to file a state tax return, depending on the state.
| Characteristics | Values |
|---|---|
| Who needs to file taxes? | International students and scholars in the US, even if they do not have US-source income. |
| Tax filing status | Nonresident tax filer or resident tax filer. |
| Tax forms | Form 1040-NR (federal tax return), Form 8843, Form 1040X, Form 1042-S, Form 1098-T, Form 1099, Form W-2, Form W-4. |
| Tax software | Sprintax, GLACIER Tax Prep. |
| Tax exemptions | FICA taxes, social security and Medicare taxes for nonimmigrant students in F-1 status. |
| Tax refunds | Available for international students, especially on scholarships covered by a tax treaty. |
| Tax rates and deductions | Vary across states. |
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What You'll Learn
Understand your residency status
Understanding your residency status is a crucial step in determining your tax obligations and requirements as an international student. This status is solely for tax purposes and does not reflect your immigration status or other residency considerations. Here is what you need to know about determining your residency status:
Nonresident Tax Filer vs. Resident Tax Filer:
Firstly, you need to establish whether you are a nonresident tax filer or a resident tax filer. This classification is based on your visa status and the length of your stay in the country. Most international students on F and J visas are considered nonresident tax filers for their first five calendar years in the US. After five years, F and J students typically become resident tax filers.
Substantial Presence Test:
The IRS uses the substantial presence test to determine residency status for federal tax filing purposes. This test takes into account the number of days you have been present in the US during the current and previous two years. If you meet the criteria outlined in this test, you are generally considered a resident alien for tax purposes.
State Tax Considerations:
In addition to federal taxes, you may also need to file state taxes. Each state has its own taxing authority, and the requirements and forms differ. Some states, like Connecticut, require international students to file a state tax return. Check the specific guidelines for the state you are residing in or have earned income in to understand your obligations.
Tax Treaties:
Tax treaties between the US and your home country may also impact your residency status for tax purposes. These treaties can exempt certain types of income from US taxes or provide special considerations. Review any applicable tax treaties to understand how they may influence your tax filing status.
Using Sprintax:
Sprintax is a user-friendly tax preparation software specifically designed for individuals who are considered nonresident aliens for tax purposes. It is offered for free by some universities and can guide you in determining your residency status and completing your tax filings.
Remember, your residency status for tax purposes may change over time, so it is essential to review the guidelines each time you file your taxes. Understanding your residency status is the first step in ensuring you comply with your tax obligations as an international student in the US.
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Know your tax obligations
As an international student, it's important to understand your tax obligations when filing taxes in a foreign country. Here are some key points to help you navigate your tax responsibilities:
Tax Filing Requirements:
Firstly, it's essential to determine your tax filing status as it will impact how you are taxed and which forms you need to fill out. Most international students on F and J visas are considered non-residents for tax purposes for their first five calendar years in the US. During this period, you will likely need to file Form 1040-NR (federal tax return) to report your income and assess your federal tax obligations.
Income Considerations:
Your income sources will play a significant role in your tax obligations. If you receive a taxable scholarship, stipend, or fellowship grant, it will generally be considered taxable income. Additionally, if you have income from employment, your earnings will be subject to tax, and your employer will typically withhold taxes from your paycheck. Remember that even if you don't earn any income, you may still need to file Form 8843 with the IRS.
State-Specific Requirements:
In the US, states have their own taxing authority, so you may need to file a state tax return in addition to your federal return. The requirements and deadlines for state tax filings vary, so be sure to check the specific rules for the state you reside in or earned income in. Some states, like Connecticut, require international students to file a state return, while others may have different criteria.
Tax Treaties:
Keep in mind that tax treaties between your home country and the US may impact your tax obligations. Income that is exempt from tax under a tax treaty must still be reported on a US income tax return, even if no tax is due. On the other hand, if your scholarship is covered by a tax treaty, you may be able to claim a tax refund.
Social Security and Medicare Taxes:
As an international student, you are generally exempt from Social Security and Medicare taxes (FICA taxes) during your non-resident status period. However, if you remain in the US beyond the specified period, you may become liable for these taxes.
It's important to carefully review your specific circumstances, visa status, and income sources to accurately determine your tax obligations. Each individual's situation may vary, so utilizing resources like Sprintax or consulting with a qualified tax professional can help ensure you meet your tax filing requirements.
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Use tax preparation software
As an international student, you can use tax preparation software to file your taxes cheaply and efficiently. This software is designed to help you navigate the US tax system, which can be complex for those who are not citizens or permanent residents.
There are several options available for tax preparation software, each with its own advantages and limitations. Here is an overview of some of the most popular choices:
Sprintax
Sprintax is a widely used online tax software that is specifically tailored to international students, scholars, and short-term working visa participants. It is the nonresident partner of choice for TurboTax and is known for its user-friendly interface. Sprintax offers federal e-filing and state tax return preparation, ensuring that you comply with IRS requirements. The software simplifies tax determination and withholding, and it can also help you access your 1042-S Forms. Additionally, Sprintax provides valuable resources and webinars to assist international students in understanding their tax obligations.
GLACIER Tax Prep
GLACIER Tax Prep is a free tax return preparation software program designed for nonresident alien students, scholars, trainees, researchers, and other educational immigration statuses. It helps users prepare their US federal income tax return Form 1040NR and Form 8843. However, it is limited to individuals with specific university affiliations, such as the University of Michigan/Ann Arbor or University of Michigan/Dearborn.
IRS Free File
The IRS Free File program is a Public-Private Partnership (PPP) between the IRS and the Free File Alliance, offering free electronic tax preparation and filing of federal tax returns for qualifying taxpayers. This service is safe, easy to use, and provided at no cost. While it primarily focuses on federal tax returns, some partner companies may also offer free state tax returns. It is important to note that you must access the IRS Free File program through the IRS website to take advantage of the free service.
Using tax preparation software can greatly simplify the process of filing your taxes as an international student. These software options provide guidance, ensure compliance, and help you maximize your tax refunds. Remember to review your specific tax obligations, residency status, and any applicable tax treaties before selecting the most suitable software for your needs.
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Collect the right documents
As an international student, the documents you need to file your taxes will depend on your residency status, the state you live in, and the source of your income. Here is a list of documents you may need to collect:
Form 1040-NR (federal tax return)
If you are considered a nonresident alien by the IRS, you will need to file Form 1040-NR to assess your federal income and taxes. This form is used to determine the amount of tax you owe on income earned in the US.
Form 8843
Even if you did not earn any income during your time in the US, you will still need to file Form 8843 with the IRS. This form is used to report the presence of nonresident aliens in the country and is required for most F-1 visa holders.
Form 1042-S
If you received a taxable scholarship, stipend, or housing allowance, you will receive a 1042-S form from your school or institution. This form shows the amount of scholarship or fellowship funds exceeding tuition and related fee charges.
Form 1099
While less common, you may receive a 1099 form if you earned rental income, investment income, or if you worked as an independent contractor. This form reports income that is not typically considered wages, salaries, or tips.
Form W-2 (Wage and Tax Statement)
If you were employed during the year, you will receive a W-2 form from your employer. This form shows your wages for the year and the amount of tax withheld. You will need this form to determine if you have overpaid or underpaid your taxes.
Social Security Number or Individual Tax Identification Number
You will need to provide your Social Security Number or Individual Tax Identification Number when filing your taxes. However, if you are only filing Form 8843, this number is not required.
Address Information and U.S. Entry/Exit Dates
You will need to provide your current U.S. address and foreign address, as well as your entry and exit dates for past and current visits to the U.S. This information can be obtained from the USCBP I-94 online system.
Academic Institution or Host Sponsor Information
You will also need to provide the name, address, and phone number of your academic institution or host sponsor.
State Tax Forms
In addition to federal tax forms, you may need to file state tax returns depending on the state you live in. Each state has its own taxing authority and tax forms, so be sure to check the requirements for your specific state. Some states, like Connecticut and Missouri, require international students to file state tax returns in addition to federal returns.
It is important to determine your residency status for tax purposes (nonresident or resident tax filer) as this will impact the forms you need to fill out. Most international students on F and J visas are considered nonresidents for their first five years in the US. Remember to review your residency status periodically, as it may change over time.
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File before the deadline
As an international student in the US, it is important to file your taxes before the deadline. The US tax system is a pay-as-you-go system, which means that there are usually automatic tax withholdings from your paycheck, stipend, or financial aid. This is estimated based on the information you provide in your W-4 or other tax documents, as well as your tax filing status and residency.
The tax year in the US runs from January 1 to December 31, and you must file your tax return by April of the following year. The deadline for filing your federal income tax return is usually April 15, and you must file Form 8843 with the IRS by this date. If you miss the deadline, you may be able to get an automatic six-month extension. However, it is important to note that missing the deadline may result in unwanted fines and penalties, and it could jeopardize your chances of securing a US visa or Green Card in the future.
In addition to your federal return, you may also need to file a state tax return, depending on the state you are in. Nine states don't have any tax-filing requirements, but most states collect state income tax in addition to federal income tax. Tax rates and deductions vary across states, so the amount you pay will depend on where you live.
Before you begin your tax return, you must determine your federal tax filing status: nonresident tax filer or resident tax filer. This status determines how you are taxed and which forms you need to fill out. Most international students and scholars on F and J visas are considered nonresidents for tax purposes. J-1 and F-1 students are typically nonresident tax filers for their first five calendar years in the US. Your tax filing status may change over time, so it is important to review the guidelines each time you complete your taxes.
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Frequently asked questions
Yes, international students are required to file taxes once per year for their first five years in the US.
You will need to determine your federal tax filing status: nonresident tax filer or resident tax filer. This will determine how you are taxed and which forms you need to fill out. You may also need an Individual Tax Identification Number (ITIN).
The cheapest way to file taxes is likely to use a free tax preparation service, such as the UW Volunteer Income Tax Assistance program or the tax preparation software Sprintax, which is provided for free by some universities.
As an international student, you will likely need to file Form 1040-NR (federal tax return) and/or a state tax return. If you did not earn any money, you will still need to file Form 8843 with the IRS. If you received a taxable scholarship, you will receive a 1042-S form. If you have been employed, you will need a W-2 Wage and Tax Statement.
Yes, many international students can claim tax refunds from the US. You may be able to claim a refund on your scholarship if it is covered by a tax treaty, or if too much tax was withheld from your paycheck.
