Archive for July, 2018

  • 5 things every J-1 participant needs to know about US tax

    Tax for J-1 students
    • What President Trump’s ‘Tax Cuts and Jobs Act’ means for J-1 visa holders
    • Understanding J-1 tax obligations and entitlements
    • Sprintax – the easy way to file a J-1 tax return!

     

    When President Donald Trump introduced his ‘Tax Cuts and Jobs Act’ in November 2017, many J-1 visa holders and international students in the US were left feeling extremely confused.

    ‘How does this bill affect me?’ ‘Do I have to file a tax return?’ ‘Can I still get a tax refund?’

    A lot of questions were left unanswered.

    Today we are here to answer these questions! If you’re going on a J-1 trip to the US simply follow this guide and you’ll be able to keep the IRS (the American tax authority) happy while receiving any US tax back you are due.

    So without further ado, here’s 5 things every J-1 participant needs to know about US tax

    Short on time? Check out our video summary instead!

    (1) Yes, you have to file a tax return!

    First things first. Every J-1 visa holder in the US must file a tax return at the end of the tax year. It’s the law!

    Prior to President Trump’s bill there were a limited number of circumstances in which a J-1 holidaymaker would not be required to file a tax return.

    This is no longer the case however, and one of the conditions of the J-1 visa is that the visa holder files a tax return.

    Filing a return          

    There are a number of ways to file a tax return.

    For starters, you could file your return directly with the IRS.

    But, for many J-1 students, filing a tax return is an extremely confusing, complicated and frankly boring task!

    The fastest, easiest and best way to prepare your US tax return is to choose Sprintax. More on this below!

    Not filing a return

    Not filing a j-1 tax return

    If you don’t file a tax return after your J-1 program, you may be subject to penalties and interest.

    The late filing penalty is 5% of the additional taxes owed amount for every month your return is late, (up to a maximum of 25%). If you file more than 60 days after the due date, the minimum penalty is $205 or 100% of your unpaid tax, whichever is less.

    Failure to comply with your tax obligations may also result in you being denied a US visa in the future.

    What is a tax residency status?

    It’s vital to determine your residency status in order to file a compliant tax return.

    The majority of J-1 visa holders are considered non-resident aliens for tax purposes by the IRS.

    When you prepare your tax return with Sprintax, our software will determine your residency status based on the information that you provide.

    Prepare your tax return with Sprintax

    (2) What do Trump’s changes mean for J-1 students

    J-1 program and tax

    The ‘Tax Cuts and Jobs Act’ has wide ranging effects for all US taxpayers – but particularly for those venturing to the States to study, for an internship or to work and travel.

    As most of these changes were activated in January 2018, it’s vital that all non-residents understand their US tax obligations and entitlements.

    The primary change for non-residents relates to what’s known as the ‘personal exemption‘.

    Prior to the bill’s introduction, every non-resident who was working in the US was entitled to a personal exemption of $4,050. In other words, if you were working in the US on a J-1 visa in 2017 you could earn up to $4,050 without paying tax. The personal exemption was also the main means that non-residents could use to get their Federal tax refund.

    However, as of 1 January 2018 (and up to 2025) the personal exemption was reduced from $4,050 to $0. The removal of the personal exemption means that overall taxable income has increased for all non-residents.

    It’s important to note that these amendments do not affect the 2017 (and previous) tax return filing season. So, if you were working in the US on a J-1 visa in 2017, you can still avail of the personal exemption.

    Prepare your tax return with Sprintax

    (3) You could still be entitled to a tax refund

    J-1 refund

    The removal of the personal exemption means that, for most non-residents, Federal tax refunds will be reduced. From the 2018 tax year onwards, the only reason a non-resident will be entitled to a Federal tax refund is if too much tax is deducted from their income.

    However, even if you’re not entitled to a Federal tax refund, it’s pretty likely you’ll be entitled to a State tax refund.

    Our average State tax refund is $175.

    But remember; to receive your State tax refund you’ll have to file your State tax return. Before you can file your State tax return, you’ll first have to file your Federal tax return!

    Bottom line? You’re legally required to file a tax return. There’s a great chance you’ll be due a State tax refund. So file your return and claim your cash!

    Claim your refund with Sprintax here!

    (4) How much tax will you pay?

    From the 2018 tax year onwards, all non-residents must pay 10% in income tax up to $9,525. And if you earn more than this amount on your J-1 program, you must pay 12% in income tax on the amount between $9,525 and $38,700.

    Case studies

    1

    J-1 in Boston

    Fred travels to Boston on a J-1 visa to work in a restaurant for the summer. During his time in the US he earns $4,000.

    If Fred was working in Boston in 2017 he would not have to pay tax on his earnings as his income does not exceed the personal exception amount of $4,050.

    However, if Fred works in Boston in 2018, he will not be able to avail of the personal exception and must pay $400 (10%) in income tax.

    2

    Fiona moves to Miami on a J-1 visa and secures work in an office for the summer. During her time in the US she earns $9,000 (the average income for around 50% of all summer work and travel participants).

    Had Fiona earned this income in 2017, her tax bill would have been $495 ($9,000 – $4,050 = $4,950. 10% of $4,950 = $495).

    However, if she earns this income in 2018 her total tax bill will be $900.

    J-1 in Miami

    The full tax rate and bracket list is as follows:

    Bracket                                             Tax rate

    $0 – $9,525                                                       10% of taxable income.

    $9,526 – $38,700                                          + 12% of the balance over $9,526

    $38,701 – $82,501                                        + 22% of the balance over $38,701

    $82,501 – $157,500                                      + 24% of the balance over $82,501

    $157,501 – $200,000                                   + 32% of the balance over $157,501

    Claim your refund with Sprintax here!

    (5) Sprintax is the easiest way to prepare your tax return

    Sprintax is the only online self-prep tax software for those on a J-1 programme and non-residents in the US. It will help you prepare your US tax return in minutes!

    When you create a Sprintax account, our system will assist you in preparing fully compliant Federal and State tax returns.

    Our software will also enable you to receive your maximum legal tax refund.

    tax refund for international students

    Sprintax is also the ‘go-to’ tax filing software for numerous major universities in the US including NYU, Columbia, Arizona State University, Illinois Institute of Technology and Cornell. We’re also the non-resident partner of choice for Turbo Tax.

    What does self-prep mean?

    Sprintax is a self-preparation tax software that allows J-1 holidaymakers to easily prepare a fully compliant tax return.

    When you create your account you’ll be asked to enter some relevant information into the software. You can then download your fully completed and complaint 1040NR (non-resident tax return).

    When you file with Sprintax you file with confidence!

    • Compliant US tax return
    • Save time and stress!
    • Determine your residency status
    • Avail of relevant international tax treaties
    • Avail of personal allowances, credits & tax deductions
    • 24/7 Vita Qualified Live Chat facility
    • Maximize your State tax refund

    Over 500k people have used Sprintax to prepare their tax return and get their tax refund.

    How much will it cost?

    The Sprintax tax prep fees are:

    $35.95 – Federal

    $25.95 – State

    But don’t forget, most J-1 visa holders are entitled to a State tax refund!

    How can I get started?

    Easy!

    Set up a Sprintax account today!

    In summary:

    • The majority of all J-1 visa holders are considered non-residents for tax purposes in the US
    • Every non-resident in the US is legally obliged to file a tax return
    • Failure to do so may result in fines, penalties and future refusal of entry to the US
    • As of 1 January 2018, non-residents are no longer entitled to claim the personal exemption of $4,050
    • However, J-1 visa holders can still apply for their State tax refund by filing a tax return
    • Sprintax makes filing your US tax return easy!
    • When you prepare your tax return with Sprintax you’ll receive your maximum legal refund

     

    Filing your US tax return with Sprintax is super cheap and easy. Get started now!

     

     

     

  • Dreaming of a work and travel trip to the US? Here’s how to turn your dream into a reality!!

    Kick start your J-1 trip

    College semester coming to an end? Striving to find something new? You may be considering venturing on a J-1 US work and travel experience of a lifetime. And you’re not alone.

    In fact 300,000 foreign visitors travel to the US each year to work and experience ‘the American dream’.

    The work and travel program enables university and college students from around the world to spend an amazing summer working and travelling in the US. Participants can gather new knowledge, gain work experience and make new friends.

    But there’s one downside. For many people, the J-1 visa application process is extremely daunting. Where do you begin? And what if you can’t find a job in the US?

    Fortunately there are a number of organisations out there that can manage your J-1 visa application for you. Some of them will even guarantee to find you work!

    Let’s take a look at some of the best options below.

    J-1 work and travel applications

    students in the US

    Viking Cultural Exchange

    Viking have been organizing US Work and Travel programs for 13 years. Their package includes a job offer, issuance of the DS-2019 form, issuance of a round trip airplane ticket to the USA and back to home country, as well as preparation of all required documents for your program. Plus you’ll get free medical insurance to cover your travel period in the US. And all of this is delivered at an ‘affordable price’. 

    Cultural Homestay International

    Cultural Homestay International (CHI) offer overseas university students a unique opportunity to intimately experience life and culture in the US.

    For almost 40 years, more than 300,000 students and young adults have visited the US to participate in CHI’s educational and cultural programs, including:

    • Academic Year High School exchange
    • Short-term Group Homestay
    • Au Pair child-care
    • Internship training
    • Work & Travel
    • Camp Counsellor experience 

    Global Current

    Global Current has been a leader in international exchange and professional training for over 50 years. They provide 48 hour processing and ‘unrivaled personal attention’ to each and every J-1 applicant.

    Cultural Exchange Network

    Cultural Exchange Network (CENET) is a non-profit organization dedicated to cultural and international exchange.

    CENET administers the below programs for students looking for a US work and travel experience:

    • the International Trainee
    • International Intern
    • S.-Mexico Intern
    • Summer Work Travel Programs

    CICD Global Opportunities

    Since 1997, CICD has provided more than a thousand students with opportunities to successfully work and travel the US. CICD offers excellent personal service, program monitoring and support.

    InterExchange

    The InterExchange team of experts have helped over 225,000 explorers travel the world for the past 50 years. They administer five J-1 visa exchange visitor Programs:

    • Au Pair
    • Camp Counsellor
    • Intern
    • Summer Work Travel
    • Trainee

    Working Adventures Worldwide

    If you’re looking for an unforgettable US experience, Working Adventures Worldwide will help you with all the planning and preparation so that you can get more fun and less stress out of your overseas experience!

    Their parent company BUNAC (headquartered in Britain) has been in the youth travel industry for over 40 years, specializing in work and volunteer abroad programs.

    Summer Camp jobs

    J-1 summer camp in the US

    USA Summer Camp

    Every year, children across America head to Summer Camp for a summer in the outdoors, experiencing new things and building up their skills. Camps employ international staff to help run the camp, working as Camp Counsellors and Camp Leaders. This is a great opportunity to earn money over the summer while doing something that you love!

    Working Adventures Worldwide

    The best part of this company’s (based in New Zealand) program offering is that they will guarantee you a camp counselor job or your money back!

    Jobs can be found in all kinds of camp counselor roles including water sports, outdoor activities, land sports, horse riding, life guarding, performing arts, arts & crafts.

    They offer:

    • Low fees (you can save up to $200)
    • High salaries
    • A personal service

    Camp America (NZ)

    Based in New Zealand, Camp America have been tried and tested by thousands of Kiwis. With Camp America you’re guaranteed a placement or a refund!

    Camp America (OZ)

    This company will be for you if you’re hoping to travel to the US from Australia to work in summer camp.

    CampStaffUSA

    Attracting candidates from all around the world, CampStaffUSA is a one of a kind staffing site that focuses on summer camp employment.  The company was founded by camp directors looking for an all-in-one solution for hiring quality summer camp staff.

    Camp Leaders

    Camp Leaders are the only specialist summer camp company based in Ireland. They provide summer camp placements at over 500 summer camps throughout America. They offer high wages and a truly unforgettable J-1 summer experience.

    American Camp Association

    If you choose the American Camp Association for your US camp placement you’ll have an opportunity to pick from 3,656 Camps and 12,184 Programs. The American Camp Association is a community of camp professionals who, for over 100 years, have joined together to share knowledge and experience and to ensure the quality of camp programs.

    Internships

    J-1 intern in the US

    USEH International

    USEH provide high quality paid international internship/training to young professionals from all around the world, specializing in Tourism and Hotel management, business administration, finance, sales & marketing and IT.

    Intrax

    Intrax Global Internships offers J-1 visa sponsorship for Interns and Trainees in the following occupational categories:

    • Arts and Culture
    • Hospitality and Tourism
    • Information Media and Communications
    • Management, Business, Commerce and Finance
    • Public Administration and Law
    • The Sciences, Engineering, Architecture, Mathematics and Industrial Occupations

    Since 1980, more than 350,000 individuals (from over 100 countries) have participated in Intrax programs.

    International Interns USA

    For over 10 years, IIUSA has helped international students and graduates to find internships in the US. They will help you to find a great internship, get a J-1 visa and find a company for your OPT training.

    Cultural Vistas

    Founded in 1963, Cultural Vistas is a non-profit exchange organization which promotes global understanding and collaboration among individuals and institutions. Annually, more than 4,500 individuals and over 900 US businesses, companies, and NGOs turn to Cultural Vistas as their trusted solution for J-1 Visa sponsorship for internship and training programs.

    Career Internship Abroad

    Founded in 2008, Career Internship Abroad (CIA) is a world-class educational consultancy firm that creates global internship opportunities for students, fresh graduates, and young professionals.

    CIA has been recognized by different international regulatory agencies and is affiliated with different educational organizations to ensure that all the participants are protected and secured.

    Council of International Programs USA

    CIPUSA offer an array of exchange programs ranging from two weeks to 18 months in duration and spanning a variety of professional fields. Their J-1 Training Visa program is open to both applicants who already have a training program lined up in the US and to those who are still looking for opportunities.

    Medical roles

    Medical jobs J-1 USA

    J1 WAIVER JOBS

    This company provides J-1 Visa Waiver Jobs For Physicians, with an emphasis on roles in Montana. With this waiver, you will not be required to return to your home country after the completion of your J-1 exchange visitor program. This is a very desirable factor for many medical doctors that come to the US on a J-1 visa.

    3RNet

    This non-profit organization helps to connect health professionals searching for jobs in rural or ‘underserved areas’ with health care facilities. 3RNet offer roles in every state!

    Hospitality positions

    J-1 working in a hotel

    Hospitality Placements USA

    This company specializes in the placement of qualified international hospitality graduates and young professionals into major brand hotels and resorts in the US. They match qualified interns and trainees into paid training positions to receive on the job training, build career experience and improve professional skills.

    Placement International

    Placement International has over 10 years of experience in offering positions for highly educated students and young professionals to do paid internships and management training programs in the most luxurious hotels and restaurants in the US. Looking to work in a top hotel brands while on your J-1 program? Step this way!

    Agricultural work

    Working on a farm on a J-1 trip

    Communicating For Agriculture Exchange Programs

    Looking to experience farm life stateside?

    CAEP brings young adults together from all over the world to share and learn ideas, beliefs, and agricultural practices through international paid agriculture exchange programs.

    And finally

    Tokio Marine HCC

    When you’re in the US on a J-1 visa you’ll no doubt be hoping to earn some money to supplement your trip. However as the saying goes – ‘your health is your wealth’! In the US, you’ll have access to quality medical care for any unexpected illnesses or injuries you may encounter during your trip. But this care can be extremely costly without insurance coverage. Tokio Marine HCC can provide coverage in the event of an accident or emergency as you travel within the US. You’ll be back on your feet in no time!

     

  • I filed an incorrect tax return. What should I do now?

    Amending your tax return

    “Don’t worry if you made a mistake on your tax return or forgot to claim a tax credit or deduction. You can fix it by filing an amended return.” – The IRS

    The Internal Revenue Service (IRS) knows the tax code is complex, and that people make mistakes. A tax return can be considered ‘incorrect’ or ‘incomplete’ for a variety of different reasons. Simple things like forgetting to sign a form to big issues like misreporting income or incorrectly calculating a deduction can all effect the validity of a tax return. If you realize that you made an error on a tax return you already filed or you have come across new information (for example you received an additional W-2 or 1042-S), simply file an amended tax return to make a correction.

    It’s very important to note that you should not attempt to correct the situation by filing another original Form 1040NR return. That will confuse things further and may cause additional headaches for you. Instead file a Form 1040X, even if you filed your original return only a few days ago.

    Need a hand filing your amended tax return? Contact Sprintax today!

    Here are some key things you need to know in order to correctly amend your tax return:

    When to Amend a Tax Return That You Filed

    The first thing you should know is that not all errors require an amended tax return. You should amend your tax return if you need to:

    • Correct your filing status – for example, if your filed as single but actually got married on the last day of the tax year, you will need to amend your return by filing his taxes under the appropriate status – married filing jointly or married filing separately (note: non-residents can file only as married filing separately).

    Filing US tax return as a married couple

    • Correct your income and tax figures because you did not include all your payment documents when preparing your return. If you receive additional tax documents for the tax year, for example, a Form W-2 arrives in the mail after the tax deadline, you would need to file an amended tax return to report the additional income and tax.
    • You should also amend your return to claim all of the allowable tax deductions or tax credits that you did not claim when you filed your original return. In previous years there were a number of deductions that international students could use to reduce their overall tax liability. However, in November 2017, President Donald Trump introduced a GOP tax reform bill which brought widespread tax-related changes for most taxpayers.
    • Correct the number of dependents you claimed. An amended return will be needed if a taxpayer wants to claim additional dependents, or has claimed ineligible dependents and needs to adjust the exemptions amount. The general IRS rule states that a non-resident alien, whether single or married, may claim only one personal exemption, as long as they are not claimed as a dependent on any other US tax return (in which case their personal exemption was already used). There are some exceptions to the general rule which allow specific groups of taxpayers to claim dependent exemptions for their family members:
    • Residents of Canada or Mexico
    • Residents of the Republic of Korea
    • Residents of India

    Check out if you qualify to claim an additional exemption for your dependent here.

    If you realize that you need to make one or more of the corrections listed above use Form 1040X to amend the federal income tax return that you previously filed.

    Need a hand filing your amended tax return? Contact Sprintax today!

    When Not to Amend a Tax Return That You Filed

    In some cases, you don’t need to amend your tax return. The IRS usually corrects math errors when processing your original return. If you didn’t include a required form or schedule, you’ll receive a request for the missing item needed to finish processing your tax return. When you receive a notice about errors, there will usually be other ways to correct errors besides an amended tax return.

    Usually, these misunderstanding can be quickly rectified by providing the correct information to the IRS. The notice that you receive will explain clearly what the issue is and how to respond.

    filing a US tax return

    How to Amend a Tax Return That You Filed

    To amend your tax return you will need:

    • A form 1040X
    • Your original tax return
    • New documents

    The Form 1040X is two pages long and you are only required to include new or updated information. You will also find a space where you can write an explanation as to why you are amending your return.

    It’s very important to ensure you are using the latest version of the 1040X.

    Once you complete the form, you’ll have to mail it to the IRS along with all required supporting document. Amended returns are only filed on paper. The normal processing time for a Form 1040X, is between 8 and 12 weeks from the time the IRS receives your tax return.

    If you are amending for more than one tax year, you will need file Form 1040X for each tax year separately.

    Many people find the prospect of dealing with the IRS and amending their tax return to be quite daunting. If that sounds like you, contact Sprintax today!

    What Happens After You Amend Your Tax Return

    US tax refund

    If you are filing an amended tax return to claim an additional refund, you’ll have to wait until you have received your original tax refund before filing a Form 1040X. Amended returns take up to 12 weeks to process. You may cash your original refund check while waiting for the additional refund. Also you generally MUST file the amended return within three years from the date you filed your original return, or within two years after the date you paid the tax (whichever is later) in order to get the extra refund.

    If you owe additional taxes with Form 1040X, file it and pay the tax as soon as possible to minimize interest and penalties. If your amended return shows you owe more tax than you reported on (and paid with) your original return, you’ll owe additional interest and probably penalties too. Even though you might be amending a return from one or two years ago, the due date for your original return and for payment has already passed. The IRS may not penalize you for a small mistake, but it sure will collect some interest on the proper amount you didn’t pay on time in the first place. The sooner you correct the error, the less interest you’ll pay.

    Don’t hesitate to contact the Sprintax team if you need help with amending your return!