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  • 5 important US tax documents every international student should know

    Tax solutions for nonresidents in the US

    Let’s face it.

    Tax is super boring!

    And when you move to the US as an international student or scholar, the local tax system will likely be the furthest thing from your mind.

    However, boring or not, compliance with the American tax authorities – the IRS – is crucial for any international student. In fact it’s one of the conditions of your visa! And how you handle your US tax affairs can play a big part in the outcome of your future visa or Green Card applications.

    But, by doing some research into US tax when you first arrive, you can save you a lot of hassle down the line.

    Thankfully, your friends at Sprintax are here to help!

    Tax information for nonresidents in USA

    As a nonresident, there are a number of key tax forms and documents that you’ll need to become very familiar with during your time in the US.

    In this blog, you’ll find a guide to five of the most important tax documents including what each form is used for, why you need to file them, and the easiest way to complete each form.

    The documents we will be looking at are:

    • Form SS-5 & W-7
    • W-4
    • W-8BEN
    • Form 8233
    • 1040NR & 1040NR-EZ

    Key Terms

    But before we get started, there are a couple of key terms that you will see popping up in many of the tax forms you will encounter during your time in the US. These terms can often cause considerable confusion for many international students and, with this in mind, we have briefly explained some of the most common terms below.

    Tax year – An American tax year is counted from January 1 – December 31, One of the most important dates during the tax year is April 15 – this is the tax filing deadline. The tax return you file must relate to the previous tax year. In other words, the tax return you file on April 15 2020 will account for the income you earned during the 2019 tax year.

    Residency status – Most international students will be treated differently to US citizens when it comes to tax in America. International students and scholars are usually referred to as ‘nonresident aliens’ for tax purposes in the US.

    Withholding Agent – Usually an organisation that pays your income will also withhold tax from that income. This organisation is known as a ‘withholding agent’. In other words, if you are receiving income from your university, that university will likely be your withholding agent.

    Tax Treaty – A tax treaty is an agreement between two countries about how they tax each other’s residents. Many students can avail of tax treaty benefits and are entitled to reductions in the amount of tax that is deducted from their wages.

    Taxpayer Identification Number (TIN) – A Taxpayer Identification Number (TIN) is a unique number that is used to identify you for tax purposes in the United States. Two of the most common types of TIN include the Social Security Number (SSN) and the Individual Taxpayer Identification Number (ITIN).

    Tax information for nonresidents employed in USA

    (1) Form SS-5 & W-7

    Social Security Number applications Sprintax

    One of the first things that you should do when you arrive in the US is apply for a Social Security Number (SSN) and you expect to work in the US.

    As mentioned above, you cannot work and earn income in the US without a TIN which the IRS can use to identify you. The SSN is the most common type of identifier if you are allowed to work on or off campus in the US.

    Simply put, you will not be able to work in the US as a nonresident student without a number the IRS can use to identify you for tax purposes.

    You can apply for a Social Security Card directly with your local SSA office by completing a Form SS-5. When you are submitting your SS-5 you will also need to bring along some original documentation showing your age, identity, immigration status, and entitlement to work in the US.

    Meanwhile, if you expect to receive taxable Scholarship, Fellowship or Grant Income or any other income that is not employment income, you most probably do not qualify for a Social Security Number (SSN), you must instead apply for an Individual Taxpayer Identification Number (ITIN). ITIN is only used for tax purposes and it is recognized only by the IRS and some state tax offices, but not by SSA.

    You can apply for your ITIN with the IRS directly by completing a W-7 form.

    W-7 Form Sprintax

    (2) W-4

    When you start working and earning income in the US, your employer will give you a W-4 form on your first day in a new job.

    The purpose of this form is to determine how much tax should be withheld from your wages, scholarship, or grant.

    It’s crucial that you complete your Form W-4 correctly. If your W-4 is not right, you may pay too little tax during the year and face a large balancing payment at the end of the tax year.

    Completing a W-4 form

    W-4 Form Sprintax

    In order to fill out your W-4 you will need to provide some personal details including your name, US address, TIN and marital status (tip: enter ‘single’ unless you’re married to a US citizen and filing jointly).

    It’s also important to keep in mind that, as a nonresident, you can only claim one allowance on your W-4 Form – unless you are a resident of Canada, Mexico, India or the Republic of Korea, in which you may case you may be able to claim additional allowances.

    Finally, before submitting your form, it’s always a good idea to double check the form to ensure each detail is correct. Once you are satisfied that your W-4 is accurate, you should print the form, sign and date it and give it to your employer.

    (3) W-8BEN

    W8 BEN Form Sprintax

    The US has lots of different tax treaties with many countries around the world.

    And the good news is that, as a nonresident international student in the US, you may be able to avail of a tax treaty in order to pay a reduced amount of US tax on income you earn from working at a university, your OPT, teaching or research and other types of payments.

    In fact, you may not have to pay any US tax at all, depending on the type of tax treaty!

    In order to claim a tax treaty benefit you must fill out a W-8 Form or 8233 form.

    There are a variety of W-8 forms and each is fairly complex. The W-8BEN is the most common type used by nonresident employees.

    Completing a W-8BEN

    In truth, a W-8 form is fairly complex and it can be tricky to complete.

    Though it requires the basics like name, country of origin and TIN, it also asks for the contacts from which it is receiving the income it reports. Often, a professional is consulted to assist in completing Part II the form, concerning tax treaty eligibility and details.

    For example, determining your tax treaty eligibility is really easy with Sprintax!

    All you have to do is enter your information into our short questionnaire. Our software will then instantly determine whether or not you’re permitted to claim a tax treaty.

    And, if you are entitled to claim a tax treaty, our system will automatically apply it to the calculations on your tax return. It’s that easy!

    Find out more here.

     (4) Form 8233

    Form 8233 Sprintax

    If you receive non-compensatory scholarship or fellowship income and personal services income (including compensatory scholarship or fellowship income) from your university and you want to claim a tax treaty benefit for both and pay a reduced amount of US tax you will need to complete a Form 8233 and submit it to your university.

    You must complete a separate Form 8233:

    • For each tax year (be sure to specify the tax year in the space provided above Part I of the form)
    • For each withholding agent (University)

    and

    • For each type of income

    In order to complete a Form 8233 you will need:

    • Personal information such as your name, TIN and address in your country of residence
    • Details of your US visa type including:
      – The date of your entry to the US (relating to your current non-immigrant status) and the date that your current non-immigrant status expires
      – You may also need to include a copy of your visa
    • A description of the services provided, and the total amount of income earned
    • The exact treaty (and article of the treaty) on which you are basing your claim for tax exemption
    • And more

    (5) 1040NR & 1040NR-EZ

    1040NR-EZ Form

    Every nonresident alien studying in the US is legally required to file a tax return and you do so either by filing a 1040NR or 1040NR-EZ form – depending on your circumstances.

    Which tax return should I file?

    Most nonresident international students will be required to file a 1040NR-EZ tax return.

    You should use 1040NR-EZ instead of Form 1040NR if each of the below sounds like you.

    • Your taxable income is less than $100,000.
    • Your only US source income was from wages, salaries, tips, refunds of state and local income taxes, scholarship or fellowship grants, and non-taxable interest or dividends. Note: If you had taxable interest or dividend income, you must use Form 1040NR.
    • The only taxes you owe are:
    • The tax from the Tax Table

    or

    • Unreported social security and Medicare tax from Form 4137 or 8919
    • You do not claim any tax credits
    • The only itemized deduction you can claim is for state and local income taxes. Note: Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes.
    • The only exclusion you can claim is the exclusion for scholarship and fellowship grants, and the only adjustment to income you can take is the student loan interest deduction
    • You do not claim a child or child care expenses tax credits
    • You cannot claim any deduction other than the student loan interest deduction and the itemized deduction for state and local income taxes (or, if a resident of India who was a student or business apprentice, the standard deduction)
    • You do not claim any dependents
    • You cannot be claimed as a dependent on another person’s US tax return (such as your parent’s return)
    • If you expatriated or terminated your US residency, or you are subject to the expatriation tax, you must use Form 1040NR if you are required to file that form

    US nonresident students tax questions answered

    In order to complete your 1040NR-EZ you will need…

    • Personal information
      Including your name, address and TIN
    • Details of your wages, salaries, tips, etc.
      Your employer will provide you with a Form W-2 (Wage and Tax Statement) by early February and you will find this document very useful when you are filing your end of year tax return.The form includes important details regarding your total gross earnings including wages, tips and taxable fringe benefits, and the Federal and State tax that is withheld.
    • Details of your scholarship and fellowship grants, if applicable
    • Details of treaty-exempt income
      If you are entitled to avail of tax treaty benefits, you should report all your income that is exempt on your Form 1040NR-EZ
    • Your signature!
      Don’t forget to sign your return. Form 1040NR-EZ is not considered a valid return unless you sign and date it.

    The deadline for filing a 1040NR-EZ is typically April 15.

    Who can help?

    Sprintax Important US tax information for nonresident students

    If you, like many other international students find US tax to be daunting, you may be wondering if anyone can help you complete your tax documents correctly and ensure your compliance with the IRS.

    The answer?

    Simply choose Sprintax!

    Sprintax is the only online self-prep tax software for nonresidents in the US. When you choose Sprintax, you can enjoy a stress-free service from start-to-finish. Plus, if you have any questions, our live chat team are on hand 24/7 to support you.

    When you create your account, the Sprintax software will assist you in preparing fully compliant 1040NR-EZ Federal and State tax returns. Sprintax will also enable you to receive your maximum legal tax refund.

    Find out more here

    Sprintax TDS

    Our Tax Determination Software (TDS) is designed specifically for educational institutions to ensure that nonresident students, scholars, and employees are taxed correctly and that the right amount of tax is withheld from earnings and reported to the IRS. You can easily apply for your SSN, establish your tax residency status and determine your tax treaty entitlement. Sprintax TDS can also be used to easily prepare tax forms such as the SS-5, W-8BEN, 8233 and W-4 and help students to secure their SSN or ITIN.

    Learn more about Sprintax TDS here

    Subscribe to the Sprintax Blog!

    US tax can be confusing. Especially for nonresidents!

    That’s why, if you’re an International Student or J-1 participant in the US, or you work in a University International Student Office, you should subscribe to the Sprintax blog.

    You’ll find tons of useful content for nonresidents. We cover tax, student life, acclimatizing to the US and much more.

    So what are you waiting for? Sign up today and never miss a thing!





  • The International Students Guide to US College Application Letters

    How to write the perfect US college application essay

    If you want to study in the US as an international student, you should probably start thinking about your college application letter.

    Wait, what is a US college application letter?

    In the US, it’s common for colleges and universities to request applicants to submit a personal essay or letter.

    Don’t worry if this is new to you – the Sprintax team is here to help you write an essay that’s guaranteed to get you a place in the US college of your dreams.

     

    But first, what is the aim of a US college application essay?

    Colleges want to find out more about who you are. Your essay should tell the university about you, and convince them that you’re the kind of person who they need at their college. These schools accept students who they believe will contribute something special.

    This might be a challenge, especially if English isn’t your first language, but it’s a positive thing because they’re giving you an opportunity to say something and make a statement about yourself. This is your chance to share your personality with them and impress them beyond your grades.

     

    How to write the perfect US college application essay

    What kind of essay will I be expected to write?

    This will depend on the colleges that you’re applying to, but we’re going to talk about the three most common types of college application essay; The Common Application, The Universal Application and the Individual Institution Application.

     

    1. The Common Application

    This system allows students to complete one application for multiple colleges. A student may send this single application to any college that is a Common Application member. There around 700 member colleges in the US.

    For the essay part of this application, you will choose one of five prompts. A prompt is a title or a topic that you must write about. Think carefully about each prompt. Write down ideas related to each one and decide which topic you believe will result in the most interesting and engaging essay.

    Consider your own personal skills and life experiences and how they relate to the topic. If you’re having trouble choosing, ask people who are close to you for advice, they may think of something that you have overlooked or forgotten about.

    1. The Universal Application

    The Universal application is not very common, in fact, there are currently only around 30 colleges currently accepting this form of application. Much like the Common Application, students only need to complete this application once for all participating colleges.

    For this application, you will be given an essay title and topic to write about.

    1. Individual Institution Application

    Some colleges, especially private colleges, request applicants to submit an application that is specific to their institution. This form of application may require you to answer a question or write an essay on why you would like to attend their college.

     

    What should I write about in my US college application essay?

    Once you’ve chosen a suitable topic you should do what is known in the US as ‘brainstorming’. This is where you take the time to come up with as many ideas as possible around a topic. Sit down somewhere quiet with a pen and paper, or your computer and see what you come up with. It doesn’t matter how silly an idea might seem, write it down anyway. This process is about coming up with as many ideas as you can.

    To get started, think about the following subjects and how they relate to your life. Write down a few sentences for each subject.

    • Sports, school clubs, after school activities.
    • Hobbies and interests (for example; music, art, sports, reading)
    • Vacation, travel and times you’ve been abroad
    • Work experience if you have any
    • People who are close to you like family and friends
    • Special occasions
    • Experiences and events in your life that had a lasting effect on who you are

     

    How do I write an introduction?

    Once you have made a decision about what you will discuss in your essay, you’ll need to write an introduction. The introduction is important because you need to grab the reader’s attention straight away. An exciting or meaningful opening sentence is very important as it will set the tone for your essay.

    Imagine that you are the individual on the admissions faculty. You are reading thousands of application essays every day. It’s important that your letter stands out. You want this person to think ‘yes, this is someone interesting and we would be lucky to have them in our college.’

    It’s recommended that you write the introduction last when you know exactly what you will cover in your essay. Don’t waste the introduction describing what you’re going to talk about. Use it as an opportunity to show them that you’re a unique and interesting person.

    How to write the perfect US college application essay

    Make sure your essay flows well

    Your essay should flow well, meaning it should be consistent and each paragraph should be in an order that makes sense to the reader.

    For example, if you’re writing about an event like ‘The first time I travelled to a new place without my parents’. You could have a paragraph for each of the following:

    • How your parents felt about your trip and the promises or compromises that you had to make with them in order for them to give you permission to go.
    • How did you plan or prepare for the trip? Did you need a visa? Flights? New clothes?
    • How did you pay for the trip? Did you spend pocket money? Save from an after school job?
    • What did the experience teach you? – how to save money, how to be organised, etc.
    • How did the experience improve your understanding of adult life, what skills did you gain from the experience, what happened when you went?

    There will be a limit on how many words you may use. Make sure you don’t go too far over or under the word count. It’s important that you read the guidelines carefully because it will show that you can follow instructions.

    Tell a story

    It’s a good idea to write the same story two or three different ways. Choose the most important points you want to get across and have a strong, clear idea of what you would like to say and write it in 3 different styles. You might find that one way is way more interesting or engaging than another.

    Don’t be afraid to write about yourself in an unflattering light

    Nobody’s perfect! In fact, sometimes it shows courage to write about a time when you failed, when you struggled or even a time when you were embarrassed. Just make sure that you show that you learned from the experience or how it made you stronger. Everyone has their flaws and everyone makes mistakes, the important part is showing that you’ve learned from it in some way.

    Writing a conclusion

    The end of your essay should leave a good impression on the reader. It should summarise what you learned from the experience and how it has made you the person you are today.

    Explain how your experience will help you succeed with the college course and how it has made you a valuable asset to the university.

    It’s a good idea to include a couple of sentences about what your plans for the future are. Do you have a specific career in mind? Is there anything you’re looking forward to learning during your time in university? How will getting into this college help you to achieve your life goals? This will show that you have thought about how you will use your degree after you finish college.

    This exercise is as much about being an interesting person as it is about being an interested person. And what we mean by that is, show some real enthusiasm for the course, the college and even your own hobbies.

    Editing and improving your essay

    No matter how great your essay is, you should always ask friends, family, even teachers to read it and give you feedback. You can use the advice of others to improve your essay and make it the very best it can be.

    It’s also not a good idea to rely on spellcheck and grammar checks that are built into the computer program you’re using. A human can often spot small errors and typos that the spellchecker may have missed. Your essay should be as perfect as possible when it comes to grammar and spelling.

    It is especially important to check if English isn’t your first language. Do you know someone who is particularly good at English or who has English as a first language? Ask them to take a look at what you’ve written and see if it can be improved. A well written, polished essay could be your ticket to studying at the university of your choice in the US.

    In summary, be sure to read the application guidelines carefully, brainstorm and think a lot about what you will write about, edit your essay and ask other people to check it. We hope this helps you write an excellent college application and best of luck from the Sprintax team!

    Subscribe to the Sprintax Blog!

    US tax can be confusing. Especially for nonresidents!

    That’s why, if you’re an International Student or J-1 participant in the US, or you work in a University International Student Office, you should subscribe to the Sprintax blog.

    You’ll find tons of useful content for nonresidents. We cover tax, student life, acclimatizing to the US and much more.

    So what are you waiting for? Sign up today and never miss a thing!





  • How to Prepare for 1042-S Season

    Student international office us university

     

    Preparing a 1042-S isn’t an easy task, and to make matters worse, filing incorrectly can lead to penalties, fines and unnecessary stress. But not to worry, today we will address some of the most common questions associated with filing a 1042-S;

    What is a 1042-S?

    How do I know what income to report?

    What deadlines should I be aware of when filing a 1042-S?

    Should I be aware of any changes in filing regulations since last year? 

     

    What is a 1042-S?

    Let’s start with the basics: what is a form 1042 and a 1042-S?

    Form 1042:      Annual Withholding Tax Return for U.S. Source Income of Foreign Persons

    Form 1042-S:   Foreign Person’s U.S. Source Income Subject to Withholding

    These forms are IRS tax forms that deal specifically with payments from nonresident aliens and other foreign persons.

     

    How do I know if I should file a 1042-S?

    Does your school employ nonresident aliens? If the answer to this question is yes, then you are obliged to file a 1042-S form with the IRS for every single nonresident individual who receives payment of income from your institution. This ‘payment’ may include; scholarships, personal service income, and royalties for example.

    If your institution’s employees are non-US citizens, it’s your responsibility to file on their behalf. This might be a cafeteria worker or a college tutor for example. A copy of the Form 1042-S must also be sent to the nonresident alien individual.

    A Form 1042 summarises the information reported on a 1042-S which you issue to your students and employees. It reports the liability of the withholding agent on the tax they have withheld or should have withheld. You are informing the IRS of the total cumulative amount of payments which you have paid to a non-US person during the tax year.

     

     

    How do I determine if an income should be reported on a 1042-S?

    We’ve established that a form 1042-S allows us to report any payments you pay to a foreign person. However, it’s crucial for the payroll office to understand what kind of income should be reported on a 1042-S. If you have any concerns about this, don’t worry Sprintax is here to help you make sense of it all.

     

    What income should I report on a 1042-S?

    In order for income to be reportable on a 1042-S, it must have been earned in the US by a foreign person or it must be income exempt under tax treaty or other IRC article covering non-US person’s income.

    Do report: Payments like interest and dividends, payments for scholarships and grants, except payments for tuition to a degree candidate, rents and royalties and licensing fees if they were earned from sources inside the US.

    Don’t report: Payment for goods, inventory, equipment, raw materials etc. Money generated from these sources should not be reported when paid to a foreign person.

     

     

    When is the Form 1042-S due?

    A Form 1042-S must be filed with the IRS before 15 March of the next tax year. You also must provide a 1042-S copy to your payees by 31st of January after the year ending.

    Filers may request an automatic 30-day extension by filing Form 8809, Application for Extension of Time to File Information Returns, no later than 15 March of the next tax year. A second extension may be requested with Form 8809, but approval is not automatic.

     

    Furnishing a recipient (payee) copy

    Due date is 31st of January, of the year after the tax year of payment. The filer must provide their students directly with a copy of the form.

    All financial institutions (including investment funds) must file Forms 1042-S electronically through the IRS’s Filing Information Returns Electronically (FIRE) system, regardless of how many forms they file.

    Other entities that file 250 or more forms must file electronically as well. The IRS will confirm within five business days that the transmission was successful. Look to the 2018 IRS Publication 1187 for guidance on electronic filing.

     

    Getting an extension for a 1042-S

    Filers may request an automatic 30-day extension by filing a Form 8809: Application for Extension of Time to File Information Returns, no later than 15 March of the next tax year. A second extension may be requested but approval is not automatic.

    It is possible to request a third or fourth extension but unfortunately, the chances of receiving a response or approval for more than two extensions are slim to none.

     

    How is a 1042-S filed correctly?

    There are certain mandatory fields that you must fill in, in order to correctly file a 1042-S but it’s also important to note that you must assign each form a unique 10-digit numeric identifier number for each 1042-S that you prepare.

    If you have two separate 1042-S if you pay different types of income to a single payee – say for example you’re paying them interest and dividends – you will need to fill out two separate 1042-S forms because you have two different income types. Even though it’s the same payee, you need two separate identifiers. This unique identifier is required if you need to make an amendment to the Form 1042-S, otherwise would be impossible for the IRS to distinguish between forms and understand which form you are amending.

     

    Which fields are mandatory for a 1042-S?

    There are a number of fields that are mandatory on the form but which fields you fill in will often depend on the person whom you’re filing for and their own unique personal circumstances. TDS performs these checks and the population of the forms. Click here to get help from Sprintax TDS.

    Student international office us university

    Have there been any changes to the form for the year 2019?

    Yes, there have been some changes made to the 1042-S for 2018. These changes are as follows:

    • Boxes 7b and 10 have been updated with clarifying language

     

    • Boxes 9 and 11 have been switched and clarifying language has been updated

     

    • Limitation on Benefits (LOB) Treaty Category code for individuals (code 01) has been removed

     

    *Box 13j should be left blank for payments made to an individual who is claiming treaty benefits.

     

    • Box 13i now has its own row.

     

    *note: Format is YYYY/MM/DD

     

     

    Want help with preparation for filing?

    In order to transmit 1042-S informational text files electronically through Filing Information Returns Electronically (FIRE) system, you must have suitable software, a service provider, or an in-house programmer that will create the file in the proper format per IRS requirements and record layouts found in publication 1187.  Unfortunately, a scanned or PDF copy will not be accepted.

    Sprintax TDS is a software solution that creates for you the informational return in text format for filing through the IRS FIRE. You can use your own Transmitter Control Code (TCC) or you can choose Sprintax to be a transmitter for you.

    Sprintax TDS is here to assist you with the more complicated aspects of tax filing prep by simplifying nonresident taxes. From calculating tax withholding for non-resident international students, scholars, and professionals to determining residency for tax purposes, built-in tax treaties and, generating all the relevant tax forms you need. Sprintax TDS means compliant, stress-free tax returns.

     

    Connect with Sprintax today to schedule a free demo for your international office.

    Subscribe to the Sprintax Blog!

    US tax can be confusing. Especially for nonresidents!

    That’s why, if you’re an International Student or J-1 participant in the US, or you work in a University International Student Office, you should subscribe to the Sprintax blog.

    You’ll find tons of useful content for nonresidents. We cover tax, student life, acclimatizing to the US and much more.

    So what are you waiting for? Sign up today and never miss a thing!





  • Hiring nonresident employees at your school? Here’s how to ensure you are tax compliant

    Withholding tax on nonresidents working in US universities

    The number of international students in the US spiraled over 1 million in 2018.

    And with many of these students also working part-time at their chosen schools, the proper documentation and withholding on payments to nonresidents has become an increasingly important topic for educational institutions in recent years.

    If you’re reading this blog, you’re probably all too familiar with the tax complexities of onboarding a nonresident at your school.

    As a Withholding Agent, it’s your responsibility to ensure your nonresident employees have the correct amount of tax withheld from their pay.

    In this guide we’ll cover everything you need to know to ensure the process goes smoothly including:

    • the forms your new employee must fill out when they start work
    • how to handle tax treaty entitlements
    • and what you can do to ensure you are withholding the correct amount of tax

    We’ll also be sharing some tips and tricks which will make life easier for your entire payroll department!

    So let’s get into it!

    Determining residency

    Determining US tax residency status

    The first thing you should do when you hire a new foreign student, scholar, researcher or professor is determine their residency status for tax purposes.

    Keeping in mind that it is against federal law to hire illegal aliens, there are three types of residency status categories to consider for any new employee:

    • US Citizen or US Resident Alien
    • Dual Status Resident
    • Nonresident Alien

    So how can you tell the difference between a Resident and Nonresident Alien?

    Resident aliens are taxed on their worldwide income (similar to US citizens).

    Nonresident aliens are only taxed on US source income and certain foreign source income that is effectively connected with a US trade or business.

    A dual status resident is a person that was both a resident alien and a nonresident alien in the same tax year.  Respectively, dual status residents are taxed as nonresident alien for the part of the year they are nonresident alien and as a resident for the rest of the year.

    There are three residency tests under which a person can be considered resident for US tax purposes:

    US Citizenship Test

    If the person has US citizenship by birth or naturalization, they are treated automatically as a resident taxpayer for tax purposes.

    Green Card Test

    Green card applications for nonresidents

    A Green Card (USCIS Form I-551) is a permanent resident card.

    It gives the holder the right to reside permanently in the US and to work without restrictions.

    Your employee will be deemed a resident alien for tax purposes during a tax year if they are granted a Green Card at any time during that year.

    Substantial Presence Test

    If your foreign employee is not a US citizen and doesn’t have a Green Card, they can still claim resident alien status if they pass the Substantial Presence Test.

    The test requires the person to have been physically present in the US for at least 183 days over a three year period including:

    • The number of days in the US for the current year (must be at least 31)
    • 1/3 the number of days in the US for the preceding year
    • 1/6 the number of days in the second preceding year

    It’s important to note that the following days don’t count towards the Substantial Presence Test:

    • Days the nonresident was an exempt individual. These are most days the nonresident was in the US as a teacher, student, or trainee on an ‘F’, ‘J’, ‘M’, or ‘Q’ visa (five years for F visas and two years for the rest)
    • Days commuted to work in the US from a residence in Canada or Mexico (as part of a regular commute from Canada or Mexico)
    • Days that the nonresident was in the US for less than 24 hours when they are in transit between two places outside the US
    • Days that the nonresident was in the US as a crew member of a foreign vessel
    • Days that the nonresident was unable to leave the US because of a medical condition that arose while in the US
    • Days in the US under a NATO visa as a member of a force or civilian component to NATO

    If your new employee is not a US citizen, does not have a Green Card or can’t the Substantial Presence Test, it’s pretty likely that they should be categorized as a nonresident alien for tax purposes.

    Identifying payment type

    withholding tax for nonresident working in the USA

    After you have determined the tax status of your new foreign employee, the next step is to work out their sources of income. This will help you to work out how much tax must be withheld from their income.

    A resident alien’s income is generally subject to tax in the same manner as a US citizen.

    They must report all of their wages, interest, dividends or other compensation for services, income from rental property or royalties, and other types of income (from all sources within and outside the US) on their US tax return.

    A nonresident alien’s income (subject to US income tax) can be divided into two categories:

    1. Income that is effectively connected with a trade or business in the US
    2. Income that is not effectively connected with a trade or business in the US

    The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. These are the same rates that apply to US citizens and residents.

    Income that is not effectively connected is taxed at a flat 30% (or a lower treaty) rate.

    Below are some of the most common tax codes that nonresident aliens employed in US universities will be categorised under:

    Income Code 18 – pay for dependent personal services

    Dependent personal services are personal services performed in the US by a nonresident alien as an employee rather than as an independent contractor.

    This code is for people that are not students, trainees, researchers or teachers.

    Income Code 19 – pay for teaching

    Tax for nonresident teachers US

    This code relates to compensation for nonresident alien teachers, professors, researchers and scholars by a US university or other accredited educational institution for teaching or research work at the institution.

    Income Code 20 – pay during studying and training

    Code 20 is a very common tax classification for nonresident aliens who are hired by US universities.

    This code refers to pay (as contrasted with remittances, allowances, or other forms of scholarships or fellowship grant) for personal services performed while a nonresident alien is temporarily in the US as a student, trainee, or apprentice, or while acquiring technical, professional, or business experience.

    Fixed, Determinable, Annual, or Periodical (FDAP)

    This category is used to report US source income that does not come under any of the other income categories.

    Examples of income that may be reportable under this category include:

    • Self-employment
    • Interest
    • Commission
    • Royalties

    Withholding of Tax

    If you employ international students in your university you are responsible for ensuring that the correct amount of tax is withheld from each nonresident pay check.

    Salary paid to employees under Income Codes 18, 19 or 20 must be withheld and reported at graduated rates. You generally must withhold 30% on income reported under FDAP.

    Sprintax TDS simplifies nonresident tax withholding. Find out how

    Tax Treaties

    The US has bilateral income tax treaties with a number of foreign countries.

    If you employ a resident of a country that has a tax treaty with the US, they may be entitled to lower tax rates or even exemption from withholding.

    These reduced rates and exemptions vary among countries and specific items of income.

    The US has tax treaty agreements with each of the following countries:

    US tax treatys

    Employing a nonresident who is a citizen of one of the above countries? You can find more information about their tax treaty entitlements here.

    Sprintax TDS can help you manage your nonresident’s tax treaty entitlements. Learn more here

    Key documents

    Every nonresident employee is required to fill out certain tax documents in order to ensure tax is withheld correctly from their pay. The type of document that must be completed depends largely on the employee’s personal circumstances.

    Form W-4

    W-4 tax withholding

    You should provide your new nonresident alien employee with a Form W-4 on or before their first day of work. The purpose of this form is to determine how much tax should be withheld from their pay check.

    It’s crucial that the employee’s Form W-4 is completed correctly. Incorrect W-4s can result in a build of tax liability.

    Form 8233

    Form 8233 for nonresidents

    Form 8233 must be filed by all nonresident aliens who receive non-compensatory scholarship or fellowship income and personal services income (including compensatory scholarship or fellowship income) from the same withholding agent. Form 8233 is used to claim a tax treaty withholding exemption for part or all of both of these types of income.

    W-8BEN

    W-8BEN nonresident tax form

    Nonresident aliens that earn income from one or more US source can utilize the W-8 form in order to claim tax treaty benefits. The point of this form is to notify the IRS that the nonresident should not be taxed in the traditional way.

    There are a variety of W-8 forms and each is fairly complex. The W-8BEN is the most common type used by nonresident employees.

    Other important documents

    Form SS-5

    Nonresidents can use this form in order to request a Social Security Number (SSN) and card. You will need your nonresident employee’s SSN in order to report their wages to the government.

    Form W-7

    This form is used by nonresidents to apply an Individual Taxpayer Identification Number (ITIN). Nonresidents who aren’t eligible to receive a Social Security Number, but need to file a federal tax return, require an ITIN.

    Form W-9

    This form certifies that a taxpayer identification number (TIN) is correct and confirms that a nonresident is not subject to backup withholding.

    All of these forms can be prepared easily online with Sprintax TDS. Learn more.

    How Sprintax TDS will make your life easier

    Sprintax TDS for payroll offices

    Let’s face it. Managing the tax obligations of your nonresident student employees is tricky.

    The solution?

    Sprintax TDS!

    With Sprintax TDS you can seamlessly manage the tax profile of your nonresidents all in one user-friendly and affordable platform.

    Our system ensures that students and scholars have the correct amount of tax withheld from earnings and reported to the IRS.

    How does Sprintax TDS work?

    Sprintax TDS nonresident tax withholding

    With customizable user reports, you can determine in real time the tax residency of your nonresidents and their entitlement to tax treaties. It also gives you instant access to the relevant tax forms you need such as W4, 1042-S, 8233, W-8Ben and more.

    Sprintax TDS makes life easy for foreign students, scholars, teachers, researchers and trainees too.

    A simple questionnaire will collect all of the necessary tax information from your nonresident employees. And if any queries arise for your students, our live chat team are available 24/7 to offer support – leaving less work for you and your team.

    Based on the information provided by your nonresident employees, Sprintax TDS will calculate the correct tax withholding and determine whether they are eligible for tax treaties or deductions.

    Each user also has the option to transfer their information from Sprintax TDS into our Tax Preparation System which will seamlessly prepare their Federal and State tax returns – eliminating the stress of end of season reporting.

    Benefits of choosing Sprintax TDS

    • Calculates tax withholding for non-resident international students, scholars, and professionals
    • Determines residency for tax purposes
    • Calculates tax withholding rates
    • Generates tax forms such as 1042-S, 8233, W-4, W-8Ben and more
    • Tax treaties built-in
    • Cloud based product – no software installs necessary. Simply log in to your Sprintax TDS account from anywhere at any time

    Over 400 schools have chosen Sprintax to manage the tax compliance of their nonresidents.

    Find out how Sprintax TDS can make a big difference to your University. Contact us today to book a Free Demo

     

    Subscribe to the Sprintax Blog!

    US tax can be confusing. Especially for nonresidents!

    That’s why, if you’re an International Student or J-1 participant in the US, or you work in a University International Student Office, you should subscribe to the Sprintax blog.

    You’ll find tons of useful content for nonresidents. We cover tax, student life, acclimatizing to the US and much more.

    So what are you waiting for? Sign up today and never miss a thing!





    Subscribe to the Sprintax Blog!

    US tax can be confusing. Especially for nonresidents!

    That’s why, if you’re an International Student or J-1 participant in the US, or you work in a University International Student Office, you should subscribe to the Sprintax blog.

    You’ll find tons of useful content for nonresidents. We cover tax, student life, acclimatizing to the US and much more.

    So what are you waiting for? Sign up today and never miss a thing!





  • The Ultimate International Student Freshman Survival Guide

    International Student Survival Guide

    Congratulations! You have been accepted into college or university in the US.  That makes you one in around 1 million international students studying in the USA.

    Moving to the US to study is a big decision. It takes courage to move to a new place where the language and culture can be very different to what you’re used to in your home country.

    American’s refer to their first year of college as their freshman year, and your freshman year in the US is going to be a lot of fun – as long as you’re prepared.

    There are plenty of challenges that you may face, especially in your first few weeks in the US… but not to worry, Sprintax are here to help make sure you start your first week of college prepared for just about anything.

    Start planning before you leave your home country

    Our first piece of advice is to prepare as much as possible before you leave your home country. This means getting your documents in order, working out your finances and finding a suitable place to live.

    Bring the correct documents

    The last thing you want is to get in trouble with Customs and Immigration when you arrive in the US. Make sure you have all the documents that you need to enter the country and start university. Be sure to bring the following items:

    • Passport and visa documents
    • Driver’s license
    • Health and travel insurance documents
    • Prescriptions for any medication you need
    • Prescriptions for glasses or contact lenses
    • Documents from the college or university where you will be studying i.e. confirmation of enrolment

     

    Money management

    Like many international students moving to the US, this may be the first time that you have to manage your own money. The last thing that you need is to be under financial stress while studying – avoid this stress by making a budget.

    You might be surprised to find that food, books and tuition are more expensive than you expected. We recommend researching living costs in the town or city you’re moving to.

    Track what you earn and what you spend

    Create a spreadsheet, keep a notebook or download an app and use it to keep track of your incoming and outgoing finances. This will help you to avoid overspending.

    How much money you will need depends on a) where you live and b) your lifestyle

    Budget breakdown

    Here’s a basic breakdown of what you can expect financially as an international student:

    • Income (this may be from work, from your parents or both)
    • Accommodation
    • Costs associated with accommodation (furniture, bed lined, electrical appliances, cleaning products)
    • Bills (phone, electricity, water, gas, internet, TV)
    • Transport (public transport, taxi fares, care expenses, fuel, insurance, tax, car maintenance)
    • Education costs (college tuition fees, textbooks, stationery, printing, photocopying)
    • Health costs (insurance, doctor, optician, glasses, physiotherapist, dentist)
    • Food (groceries, dining out, lunch from the cafeteria)
    • Recreation (travel, movies, nights out, nightclubs, gym, concerts)
    • Personal (clothing, sanitary products, cosmetics, haircuts, shoes)

    Taxes

    If you are studying in the US, there’s a good chance you’re working there too. It’s common for international students to take up employment to earn some extra money while studying and if you’re working in the US you have to pay taxes. You can take care of your US taxes by filing a tax return by the tax filing deadline (15 April).

    Why pay taxes?

    If you fail to file your US tax return it can affect your ability to re-enter the US at a later date. You may also have to pay fines and penalties.

    Tax can be confusing

    We understand that the US tax system can be confusing for international students. That’s why Sprintax offers a 24/7 live chat service. Our chat team are on hand day and night to guide our customers and answer all of their questions throughout the tax preparation process.

    When you’re a non-US citizen working in the US you have to figure out how to file your taxes correctly. There are a number of factors that affect how you file. For instance, your residency status. As a non-US citizen, you are most likely considered a ‘nonresident alien’ for tax purposes unless you meet the green card test or the substantial presence test. It is also possible to have a dual-status residency in some circumstances. You must then find out what forms you need to complete to file a fully compliant tax return.

    If you need help preparing for tax season, read our blog post ‘5 Things Every International Student Can do to be Ready for Tax Season’.

    If you’re still confused about filing your US taxes, Sprintax are here to help. We will review your circumstances and determine your residency status for you before helping you prepare your fully compliant US tax return.

     International Student Survival Guide

    Language

    Get to know American slang

    Slang is a term for a very informal language that is most commonly used while speaking rather than writing. It’s the kind of language that you might use when you’re ‘hanging out’ with your friends.

    It’s difficult learning a new language without having to make sense of different slang terms you hear. Our advice is always to ask if you’re unsure. Don’t be embarrassed to let people know that you don’t understand. Asking for help will allow you to pick up these phrases much faster. Many Americans will be impressed to find you can speak two languages and most will be happy to help you learn.

    So what are some popular American slang terms?

    Hanging out

    You might have noticed that we used the term ‘hanging out’ with your friends. To hang out with someone means to spend time with them in a casual setting.

    If someone invites you to their home to play video games they might ask;

    “Do you want to hang out and play video games at my apartment later?”

    You can also use hanging out to describe spending time at a certain place. So for instance;

    “I am going to hang out at the park after class”

     

    Cool

    Cool is almost an internationally used term but if you’re not familiar with its meaning, cool means that something is ‘good’ or ‘ok’.

    “The DJ at the party last night played some cool music”

    “Your friend Dave is cool. We should hang out with him again next weekend.”

     

    Screw up

    To screw something up means to make a mistake.

    “Oh no, I screwed up the last question on the exam paper”

     

    My bad

    This phrase is used to let someone know that you’ve made a small mistake.

    “I bought you the wrong brand of potato chips at the store, my bad

     

    Hit

    The word ‘hit’ is usually an action verb but Americans sometimes use it differently. Let’s look at some examples:

    “I’m going to hit the books later” (I’m going to study later)

    “That guy hit on me last night” (meaning “that guy was flirting with me last night”)

    “If you want help with your math homework you can hit up my friend Jessica” (meaning “if you want help with your math homework you can contact my friend Jessica)

     

    Get in touch

    To get in touch with someone means to contact them.

    “You can get in touch with the Student International Office from 09:00-18:00”

     

    Cram

    Cramming generally happens when you have not given yourself enough time to study for an exam, so at the very last minute (usually the day or night before the exam) you study a lot.

    “I haven’t studied all week for my exam tomorrow. I’m going to the library to cram all night.”

     

    Hangover

    A hangover describes how you feel the day after drinking a lot of alcohol.

    “I have a very bad hangover. I’m going to stay in bed and watch movies all day.”

    Tip: Before you go to America watch popular TV shows from the US to get to know the language.

     

    Making Friends

    One of the best things about moving to the US is making new friends. The best way to make new friends in college is to take part in activities. Your college campus will have lots of events going on and there are endless opportunities to meet new people. Joining an on campus gym or club is always a good way to start.

    A college club or society is a group of students that meet up and take part in activities based on shared interests. You might find that there is a film club, a drama club, a history club, a physics club etc.

    If you enjoy sports then you’re in luck, joining a school’s sports teams is an excellent way to make friends.

    Most universities dedicate the first few weeks of term to fun activities and parties that take place on campus. This is intended to freshmen make new friends and feel comfortable starting in a new school.

    You will be part of a large student population and not it’s not just American citizens. In fact, the US has more international students than any other country. If you do find yourself making friends with people from your own country, be sure to speak in English as much as possible so that you get a lot of practice in.

     

    Student accommodation

    Living in student accommodation is a great way to meet new people. You will also mix with native English speakers on a daily basis, giving you more opportunities to get to know the language. Try to secure a place in a college dormitory or some form of student accommodation.

    Tip: Put yourself out there and don’t be afraid to start a conversation with someone new.

     

    International Student Survival Guide

     

    Dealing with culture shock

    You may be excited to start studying in the US but you should know that it will take some time to adjust to the cultural differences. Your surroundings will change and you might even change but don’t worry, that’s normal! Culture shock is used to refer to the experience of getting used to a new unfamiliar culture and it’s common for international students.

    You may even experience being ‘homesick’ this is when you start to miss home. Most people who move away from home experience this feeling at some point so don’t worry. It’s normal to miss your friends, your family or your favourite foods from home. If you feel that this is affecting you and making you feel angry or very sad, make an appointment with an on-campus counsellor or talk to your friends about it.

    Be as open-minded as possible. Try new foods, listen to new types of music, and hang out with people you don’t usually hang out with. Your time in the US is all about trying new things.

    Get advice from your peers

    Do you have a relative, a neighbour or a friend who has studied in the US? Contact them or get in touch with them and ask them about their experience. They can give you great advice about what to expect.

     

    Watch out for scams

    You could end up being scammed especially when it comes to finding rented accommodation. Never exchange money until you have seen the accommodation. Unfortunately there are a lot of people out there who like to take advantage of people from outside the US.

    Have fun!

    The most important advice that we can give you is to have fun. Studying in the US is something that many can only dream about. It’s a once in a lifetime opportunity and you should make the most of it.

    Be confident in yourself and you will have a lot of wonderful experiences that you will remember for the rest of your life.

     

  • Revealed: the 14 US tax questions every nonresident student asks us!

    How to file a nonresident tax return with Sprintax

    Are you a nonresident student in America? Do you find US tax to be confusing?

    Don’t worry, you’re not alone!

    Even for the most financially savvy US citizen, American tax can be pretty tricky.

    At Sprintax, we offer a 24/7 live chat service. Our chat team are on hand to guide our customers and answer all of their tax questions throughout the prep-process.

    Following the close of the 2018 tax season, we thought it would be a good idea to run the numbers on the most common questions our team have received throughout the year and answer them here in this handy blog!

    So without further ado we can now reveal (and answer) the 14 most common US tax questions our customers ask us.

    (1) What is the difference between being resident and nonresident for tax in the US?

    If you’re not a US citizen, you will be considered a ‘nonresident alien’ for tax unless you meet the green card test or the substantial presence test. Resident aliens are taxed on all of their income as if they were a US citizen. For a nonresident alien, only income that is generated from sources within the US (excluding certain investments) is taxed.

    Confused about your residency? Sprintax will review your circumstances and determine your residency status for you.

    (2) What is dual-status residency?

    You are a ‘dual status alien’ when you have been both a US resident alien and a nonresident alien in the same tax year. Dual status does not refer to your citizenship, only to your resident status for tax purposes in the US. Based on the information you provide, Sprintax will correctly determine your residency status and inform you if you are a resident or dual-status resident. If you are considered a nonresident for tax purposes you will be able to complete your return with Sprintax.

    (3) What is the difference between residency for Federal tax purposes and for State tax purposes?

    State residency is not the same as Federal residency. Even if you are a nonresident for Federal tax purposes you may be considered resident for State tax purposes. Sprintax correctly determines your residency status based on the information provided in your account.

    The procedure for establishing State tax residency varies from State-to-State. Most States will look at a list of residency factors such as domicile (permanent residency), or the day counting rule. Owning a home, family location and financial interests are other factors which help determine residency. Depending on your circumstances, you can be considered a resident of the State in which you currently live, but still be considered domiciled in another State or country to which you intend to return.

    (4) I’m a nonresident studying in the US. Do I need to report foreign income for my Federal income tax return?

    As a nonresident you are not required to report income from sources outside the US on your US Federal tax return. However, some States may require you to report foreign employment income on your State return.

    (5) I’m a nonresident studying in the US. Should I use a 1098-T when preparing my tax return?

    No! Form 1098-T reports qualified scholarships and relevant expenses in relation to the education credits that are available for US citizens and residents only. Nonresident aliens are not eligible for these credits even if they receive a Form 1098-T. The IRS regulations State that, although no Form 1098-T is required for nonresidents, education institutions may create the form for all students for administrative purposes.

    (6) Should I file a separate return for each employer I had during the year?

    No! You should not submit separate returns for each employer you had during the year. Instead, every W-2 (and/or any other income document that you received during the year) should be reported on the same tax return.

    With Sprintax you will be able to report all your payment documents on one tax return. Simply choose the type of document(s) you have (W-2, 1042-S, 1099, etc.) and for each document type select the relevant quantity of documents.

    If, for example you had two employers you should select W-2 as the document type and ‘2’ as quantity.

    (7) What’s the difference between active and passive income?

    You receive active income in exchange for a service you have performed. It can include wages, tips, salaries, commissions and income from businesses in which there is material participation. Passive Income is earnings you receive from a rental property, limited partnership or other enterprise in which you are not actively involved.

    (8) What is a tax treaty?

    A tax treaty is an agreement between two countries regarding how they tax each other’s citizens. Residents of foreign countries that have tax treaties with the US are taxed at a reduced rate or are exempt from paying US taxes altogether. The reduced rates and exemptions vary widely among the countries that have tax treaties with the US.

    student j1 tax refund US

    (9) Who is eligible for a tax treaty?

    Each treaty has a variety of terms and clauses that will affect whether or not you can claim an exemption from paying tax. Your entitlement to avail of a tax treaty depends on a number of factors including nationality, length and purpose of stay, type of income, employment type and more. When you enter all your information in Sprintax, it will automatically determine whether you’re eligible to avail of a tax treaty. And make the appropriate calculations on your tax return.

    (10) What happens if I don’t file a compliant US tax return?

    It’s vital to comply with US tax law especially if you would like to visit the US in future. If you do not file a correct tax return you may end up having to pay some unwanted fines or penalties.

    (11) How much tax is deducted in the US?

    There are two types of income tax in the US – Federal and State. Federal tax is progressive. In other words, the more you earn the more tax will be deducted from your pay by your employer. For example, all nonresidents must pay 10% in Federal income tax up to $9,525. And if you earn more than this amount, you must pay 12% in income tax on the amount between $9,525 and $38,700. The amount of State tax that you pay depends largely on where you earn the income, as tax rates differ from State-to-State.

    (12) Am I entitled to a tax refund?

    Yes, there is a very good chance that you’ll be entitled to a tax refund. The average State tax refund for a Sprintax customer is $175. But remember, in order to receive your refund you will need to file a tax return. It’s your money. So file your return and claim your cash!

    student j1 tax refund US

    (13) Tax is so boring! What’s the easiest way to file a return?

    The easiest way to file a tax return is to choose Sprintax!

    Sprintax is the only online self-prep tax software for nonresidents in the US. When you choose Sprintax, you can enjoy a stress-free service from start to finish. Plus, if you have any questions, our live chat team are on hand 24/7 to support you.

    (14) What is the benefit of filing my tax return with Sprintax?

    When you create your account, the Sprintax software will assist you in preparing fully compliant Federal and State tax returns. Sprintax will also enable you to receive your maximum legal tax refund. Sprintax is 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 nonresident partner of choice for Turbo Tax.

    Prepare your nonresident tax return the easy way. Choose Sprintax

  • Which nationality claimed the largest US tax refund in 2019? The results are in!

    Nonresident Tax returns Sprintax

    At Sprintax we specialize in US tax prep and securing tax refunds for international students and J-1 program participants.

    But just how many tax returns do we prepare each year? And how much money can our customers claim in tax refunds?

    With tax season 2018 firmly behind us, we thought this would be a good time to crunch some numbers and find out!

    Here’s what we found…

    The Sprintax top 10!

    Indian and Chinese students top our 2018 tax prep list. In fact, we prepared over 85,000 US tax returns for Indian and Chinese students alone!

    You can see our the full tax prep list below.

    nonresidnet tax prep Sprintax

    Federal and State Tax refunds

    Indian, Chinese and Canadian students top our table of ‘highest Federal tax refunds’.

    On average, Indian students were entitled to claim back $1,391 in Federal tax. Chinese students were due $1,016 and a Canadian student could claim $1,304.

    Not bad after a busy college year!

    Meanwhile, the average Canadian student was also entitled to claim $724 in State tax refunds. It was common for British students to claim as much as $425 back in State tax. And Chinese students were due $526.

    You can see the full tables here:

    Nonresident federal tax refunds Sprintax

    Nonresident state tax returns Sprintax

     

    Missed the tax deadline?

    Every international student in the US is required to file a tax return.

    If you’re a nonresident studying in America and you didn’t file a tax return on April 15, Sprintax can help you!

    Should you file a tax return?

    There are three reasons why you should file your US tax return.

    1. Not only is filing a tax return your legal obligation, it’s also one of the conditions of your visa
    2. If you don’t file a tax return you may be hit with fines and penalties – the sooner you file the less you’ll have to pay!
    3. By not filing your tax return, you can severely jeopardize your chances of securing a US visa or Green Card in the future

    It’s also important to note that if you’re entitled to a tax refund (and judging from our table above, many students are!), you will not have to pay any penalties for filing your tax return late.

    See more information about filing a tax return late here

    Why choose Sprintax?

    Sprintax is the ‘go-to’ tax preparation software for numerous major universities in the US including, Columbia University, Arizona State University, Illinois Institute of Technology and Cornell University.  We’re also the nonresident partner of choice for TurboTax and the only online Federal and State self-prep tax software for nonresidents in the US.

    • Save time and stress!
    • Determine your tax residency status
    • Prepare a fully compliant US tax return
    • Maximize your State tax refund
    • Avail of our 24/7 Vita Qualified Live Chat facility

    Prepare your US tax return today!

     

  • Utilizar TurboTax para reclamar tu reembolso de impuestos J1 es ilegal

    Testimonial image for Sprintax

    Es difícil imaginar algo peor que el IRS (Internal Revenue Service, Servicio de Ingresos Internos) después de la experiencia J1 de tu vida.

    Sin embargo, esto es exactamente lo que puede suceder si presentas una declaración de impuestos incorrecta de Estados Unidos.

    Si trabajaste en Estados Unidos con una visa J1, entonces es probable que estés legalmente obligado a presentar tu declaración de impuestos en Estados Unidos hasta el 15 de abril como fecha límite.

    TurboTax logo

    Entonces, por ejemplo, si te encuentras con una J1 en 2018, tendrás tiempo para presentar tu declaración de impuestos hasta el 15 de abril de 2019. Si presentas tu declaración de impuestos de Estados Unidos de manera correcta, no tendrás ningún problema más adelante. Esto es importante si alguna vez deseas regresar a Estados Unidos con otra visa o por vacaciones.

    Si te encuentras en Estados Unidos con una visa J1, se te considerará no residente para efectos fiscales y por ende debes presentar una declaración como no residente.

     

    Los residentes en Estados Unidos pueden preparar y presentar su declaración de impuestos de Estados Unidos con el servicio de preparación de impuestos en línea más grande del país, TurboTax. TurboTax ofrece a los residentes en Estados Unidos una guía sobre sus impuestos y les garantiza el máximo reembolso. TurboTax ofrece un excelente servicio en línea que ayuda a millones de residentes en Estados Unidos a preparar su declaración de impuestos y reclamar los reembolsos. Es muy sencillo de usar, sin embargo TurboTax es un servicio para residentes en Estados Unidos únicamente, es por ello que no será adecuado para ti si has estado en Estados Unidos con una visa J1. Sprintax es el socio preferido de TurboTax para los no residentes que se encuentren con una visa J1.

    TurboTax es un servicio para residentes en Estados Unidos únicamente.

    Y como estudiante J1 generalmente serás considerado no residente para fines fiscales.

    Si usas TurboTax para presentar tu declaración de impuestos de Estados Unidos, terminarás haciéndolo como residente. Al ser titular de una visa J1 no residente, tu declaración de impuestos será incorrecta y ¡podrías tener problemas más adelante!

    trouble meme

     

    Al ser titular de una visa J1, NO deberías presentar una declaración como residente.

    TurboTax y cualquier otro servicio de preparación de declaración de impuestos para residentes supondrán que tu conoces tu estado de residencia, entonces, si presentas una declaración de impuestos utilizando sus servicios, podrías hacerlo involuntariamente como residente. Y si presentas una declaración inexacta, el IRS podría investigarte e imponerte multas y sanciones.

    Una de las participantes J1, la estudiante de finanzas Sofía García, de Venezuela, experimentó la rigurosidad del IRS cuando presentó su declaración como residente a través de TurboTax:

    De mayo a septiembre de 2017, Sofía trabajó como ayudante, limpiando mesas en The Surf Lodge en Montauk, Nueva York. Una amiga le sugirió TurboTax como la solución perfecta para presentar su declaración de impuestos. Desafortunadamente, Sofía presentó su declaración utilizando TurboTax a pesar de no ser residente a efectos fiscales.

    Unos meses después, en Venezuela, recibió una carta del IRS en la que se le pedía que confirmara su identidad.

    Si Sofía hubiese preparado su declaración de impuestos con el socio fiscal para no residentes de TurboTax, Sprintax, su declaración de impuestos de Estados Unidos se habría presentado sin inconvenientes. Ella tampoco tendría que haber esperado para reclamar su reembolso de impuestos. Por ejemplo, el reembolso promedio de impuestos estatales para el estado de Nueva York es actualmente de €464,18 

    Sofía recurrió a nosotros en busca de ayuda, así que procedimos a realizar una enmienda en su presentación de declaración de impuestos de Estados Unidos; el IRS podría tardar 6 meses o más en procesar la misma, lo que significa que tendrá que esperar mucho más para obtener los reembolsos.

    ¡Sofía no cometerá ese error nuevamente!

     

    Entonces, si presento una declaración de impuestos inexacta, ¿tendré problemas?

    Reclamar un reembolso al que no tienes derecho se considera evasión de impuestos, lo cual es un crimen.

    Si te atrapan, puede que tengas que pagar multas e intereses. También puedes tener problemas para volver a entrar a Estados Unidos o solicitar una Green card.

    No importa si lo realizas tú mismo o si alguna compañía lo hace por ti; si se presenta una declaración de impuestos fraudulenta en tu nombre, tú serás responsable.

    Y lo peor es que tal vez ni siquiera te des cuenta de que has quebrantado las leyes.

    “No saber” no es una excusa para el IRS.

    Entonces, una de las cosas más importantes es asegurarte de que presentes tu declaración utilizando el estado fiscal correcto, y si utilizas un preparador de impuestos, elije uno de buena reputación como Sprintax.

     

    ¡Podrías reclamar compensaciones, exenciones y créditos a los que no tienes derecho!

    Si presentas tu solicitud como residente, podrías reclamar compensaciones, exenciones o créditos a los que no tienes derecho. Esto podría resultar en un reembolso mayor. Sin embargo, como no residente no tendrás derecho a muchos de estos y deberás devolverlos al IRS si así te lo demandan.

    Esto podría significar que debas pagar una considerable factura fiscal.

    El Crédito Tributario de la Oportunidad Americana, del inglés The American Opportunity Tax Credit (AOTC), es un buen ejemplo de esto. Nos hemos encontrado con casos de estudiantes J1 que reclaman incorrectamente este crédito como un “bono de $1000”.

    Por otro lado, si alguien te dice que puede reclamar esto como un participante J1 no residente, es falso.

    El AOTC solo se encuentra disponible bajo condiciones estrictas.

    Un titular de la visa J1 no puede hacer uso del AOTC a menos que hayan transcurrido 6 años como estudiante o 3 años para todas las demás categorías en Estados Unidos y sea considerado residente a efectos fiscales. También debe encontrarse estudiando en Estados Unidos.

    Si lo reclama incorrectamente, terminará debiendo dinero al IRS, lo cual podría afectar sus solicitudes de visa futuras.

     

    Si presento una declaración de impuestos incorrecta, ¿qué sucede si hay una auditoría?

    El IRS puede auditar tus impuestos en cualquier momento dentro de un límite de tiempo de 3 años después de que hayas presentado tu declaración de impuestos. La mayoría de las personas considera que la posibilidad de una auditoría es estresante.

    Así que cuanta más ayuda obtengas, mejor.

    Si te seleccionan para una auditoría y te encuentras en problemas, Sprintax.com puede ayudarte a presentar una enmienda en tu declaración de impuestos de Estados Unidos.

     

    ¡Aquí es donde todo se volvió un problema!

    ¿Cómo evito problemas con el IRS?

    La forma más fácil de presentar tu declaración de impuestos para no residentes y permanecer del lado correcto del IRS es presentarla con Sprintax.

    Como socio autorizado de TurboTax, la preparación de impuestos J1 con Sprintax está específicamente diseñada para no residentes que presentan la declaración de impuestos de Estados Unidos. Sprintax es un servicio de autopreparación, lo que significa que puedes crear una cuenta aquí y preparar tu declaración de impuestos federales y estatales respondiendo algunas preguntas simples en línea.

     

    Así es cómo funciona:

    1. Crea una cuenta Sprintax aquí.
    2. Responde algunas simples preguntas.
    3. Carga cualquier documento requerido, como el formulario W2.
    4. Preparamos tu declaración de impuestos federales/estatales totalmente en conformidad con la ley.
    5. Deberás pagar una tarifa en línea de $35,95 por la declaración federal o $25,95 por la declaración estatal.
    6. Te indicaremos a dónde enviar tu declaración de impuestos.
    7. Imprime y envía (preséntala) al IRS según nuestras instrucciones.

     

    ¡También es esencial que respondas con honestidad cada pregunta!

    ¿Cuál es el beneficio de presentar mi declaración de impuestos?

    Un cumplimiento del 100% es probablemente el beneficio más importante de presentar una declaración de impuestos correcta.

    ¡Y si tienes derecho a un reembolso, es un plus!

    Debido a la Ley de Recortes de Impuestos y Empleos en 2017, ahora es más importante que nunca presentar tu declaración de impuestos de Estados Unidos.

    A partir del 1 de enero de 2018 (y hasta 2025) la exención personal se redujo de $4050 a $0, lo cual significa que el ingreso tributable general ha aumentado para todos los no residentes.

    Entonces, si trabajas en Estados Unidos desde 2018, debes presentar una declaración de impuestos, no importa cuánto ganes. Y si trabajaste allí en años anteriores, ¡deberías presentar una solicitud para averiguar cuánto puedes reclamar!

    La eliminación de la exención personal también significa una reducción de los reembolsos de impuestos federales para la mayoría de los no residentes.

    Es importante destacar que estas enmiendas no afectan al año 2017 (y años anteriores). Es decir, si trabajaste en Estados Unidos antes de 2018, podrías tener derecho a percibir un reembolso de impuestos federales.

     

    El reembolso promedio de Estados Unidos es actualmente de $800

    Las modificaciones no impactan en tu reembolso estatal, sin importar de qué año sea la presentación de declaración de impuestos que hagas.

    Para reclamar tu reembolso de impuestos estatales, primero debes presentar tu declaración de impuestos federales antes de presentar los estatales.

    ¿En pocas palabras?

    Estás legalmente obligado a presentar una declaración de impuestos y existe la posibilidad de que obtengas un reembolso de impuestos.

     

    ¿Y ahora qué?

    Si trabajaste en Estados Unidos en 2017 o en años anteriores, debes presentar tu declaración de impuestos tan pronto como sea posible. Puede que se te haya pasado la fecha límite, pero si te corresponde un reembolso, aún tienes la posibilidad de reclamar ese dinero.

    Si trabajaste en Estados Unidos en 2018, entonces la fecha límite para presentar la declaración es el 15 de abril de 2019.

    La forma más sencilla de hacerlo es utilizando Sprintax.

    Nuestro servicio de preparación de declaración de impuestos para no residentes te ayudará a preparar tus declaraciones de impuestos federales y estatales en minutos y te guiará a través del proceso de presentación.

    Con Sprintax obtienes:

    • Una declaración de impuestos de Estados Unidos 100% en conformidad con la ley.
    • Una comprobación de tu estado de residencia.
    • Información sobre cualquier acuerdo fiscal aplicable para reducir una obligación fiscal o aumentar un reembolso.
    • Disponibilidad de asignaciones personales, créditos y deducciones fiscales.
    • Ayuda en un chat las 24 horas en vivo.
    • Reclamaciones de cualquier reembolso de impuestos que corresponda.

     

    Más de 500 000 no residentes que trabajaron en Estados Unidos ya han utilizado Sprintax.

    Relájate y crea tu cuenta aquí ahora para comenzar a preparar tu declaración de impuestos de Estados Unidos.





  • Made an error on your tax return? Don’t worry, fixing it is not as difficult as you might think

    How to Amend your US tax return

    With Sprintax, you can now prepare amended tax returns for the 2017 and 2018 tax years easily online!

    US tax can be tricky – especially if you’re a nonresident who is not familiar with the American tax system.

    And it’s pretty easy to make a mistake on your tax return. In fact, there are a plethora of different reasons why a tax return can be viewed as ‘incorrect’ or ‘incomplete’ in the eyes of the IRS – from forgetting to sign a form to misreporting income or incorrectly calculating a deduction.

    While making a mistake on your return is not necessarily a big deal, it is important that you rectify the situation by filing an amended tax return, where appropriate.

    In this blog we’ll cover:

    • When you should amend your tax return
    • When’s there’s no need to
    • And how you can easily file an amended tax return

    Let’s get started.

    Prepare your Form 1040X with Sprintax

    Need help amending your US tax return

    When not to amend your tax return

    Firstly, it’s important to note that there are some instances where it is not necessary to amend your tax return.

    For example, if you make a math error on your return, the IRS will usually correct it themselves without the need for you to file further paperwork.

    Plus, if you forgot to include a particular form with your return, the IRS will write to you to request the missing item so that they can finish processing your tax return.

    In other words, when you receive a notice about an error, there will usually be other ways to correct errors besides an amended tax return.

    When you should file an amended tax return

    At this point it’s important to mention that, if you file an incorrect tax return, you should not file another original Form 1040NR tax return. This will only cause confusion and further problems for you.

    Instead, you should file an amended tax return form.

    While not every mistake on a tax return requires an amendment, you should amend your tax return if you need to:

    Correct your income and tax figures

    Filing your US tax return online

    If you didn’t include all your payment documents when preparing your return or if you receive additional tax documents for the tax year, (such as if a Form W-2 arrives after the tax deadline), you need to file an amended tax return to report the additional income and tax.

    Claim all of the allowable tax deductions or tax credits

    If you did not claim tax deductions or credits that you were entitled to, you should amend your tax return in order to avail of them.

    Correct your filing status

    For example, if your filed as a single individual but actually got married on the last day of the tax year, you will need to amend your return by filing your taxes under the appropriate status – married filing jointly or married filing separately (note: nonresidents can only file as ‘married filing separately’).

    Correct the number of dependents claimed for on your return

    An amended return will be required if you want to claim additional dependents, or you have claimed for ineligible dependents.

    The general IRS rule states that a nonresident 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.

    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

    You can check out if you qualify to claim an additional exemption for your dependent here.

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

    How to Amend a Tax Return That You Filed

    You should file a Form 1040X in order to amend the federal income tax return that you filed previously.

    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.

    Once you complete the form, you’ll have to mail it to the IRS along with all of the required supporting documents. 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. But if you find US tax to be confusing, and you’d like a hand preparing your amended tax return, Sprintax can help you!

    By creating a Sprintax account, you can easily prepare amended tax returns for the 2017 and 2018 tax years online.

    Plus, if you’ve got any questions about US tax, our team are on hand 24/7 to help you.

    Amend your US tax return the easy way today!

    Here’s what our system looks like!

    Amending a tax return with Sprintax

    Amending tax returns and your tax refund

    If you are filing an amended tax return in order to claim an additional refund, you’ll have to wait until you have received your original tax refund before filing your Form 1040X.

    In order to receive an extra tax refund, you must generally file your amended tax return within three years (or within two years after the date you paid the tax – whichever is later).

    Amending tax return tax refund

    If your amended return shows you owe more tax than you reported on your original return, you’ll likely owe additional interest and penalties too. This is why you should file your amended tax return and pay the liability as soon as possible in order to minimise any penalties.

    In other words, the sooner you correct the error, the less interest you’ll pay!

    Subscribe to the Sprintax Blog!

    US tax can be confusing. Especially for nonresidents!

    That’s why, if you’re an International Student or J-1 participant in the US, or you work in a University International Student Office, you should subscribe to the Sprintax blog.

    You’ll find tons of useful content for nonresidents. We cover tax, student life, acclimatizing to the US and much more.

    So what are you waiting for? Sign up today and never miss a thing!





  • Missed the US tax deadline? Here’s what to do

    Filing your tax return late Sprintax

    Tax season is over for another year (phew!).

    Every international student or J-1 participant in the US was obliged to file a tax return before the 15 April deadline.

    But what happens if you didn’t file your return? What should you do next?

    Filing late

    Firstly it’s important to note that, by not filing your tax return, you can severely jeopardise your chances of securing a US visa or Green Card in the future.

    The second point to keep in mind is that failure to file a tax return may result in you being hit with fines or penalties.

    There are two different types of penalties that you may be subjected to – late filing and late payment.

    The late filing fees are much more significant than the late payment costs. That’s why it’s a good idea to file your tax return as soon as you can, even if you’re not in a position to pay your tax bill.

    Simply put, the sooner you file, the less you’ll have to pay in penalties.

    US tax return prep

    US tax late filing & payment penalties

    • A failure-to-file penalty may apply if you did not file by the deadline. Similarly a failure-to-pay penalty may also apply if you did not pay all of the taxes you owe by the tax filing deadline.
    • The failure-to-file penalty is generally more severe than the failure-to-pay penalty. This is why you should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date.
    • The penalty for filing late is normally 5% of the unpaid taxes for each month (or part month) that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25% of your unpaid taxes.
    • If you do not pay your taxes by the tax deadline, you will normally face a failure-to-pay penalty of 0.5% of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date.
    • If both the 5% failure-to-file penalty and the 0.5% failure-to-pay penalties apply in any month, the maximum penalty that you’ll pay for both is 5%.
    • If you file your return more than 60 days after the due date or extended due date, the minimum penalty is $135 or 100% of the unpaid tax (whichever is less).

    So what should you do if you can’t afford to pay your outstanding tax liability in full?

    Firstly, you should pay as much as you can when you’re filing your tax return. This way you can minimize any penalties and interest charges imposed.

    Next, you can contact the IRS and request a payment plan or installment agreement which will allow you to pay your tax bill in set amounts every month.

    To establish a payment plan, simply apply online with the IRS payment agreement.

    Avoid US tax penalties and fines

    Due a tax refund?

    If you’re entitled to a tax refund, you will not have to pay any penalties for filing your tax return late.

    You have until 14 April 2022 (15 October 2022 with an extension) to file a 2018 tax return if you are due a refund for that tax year.

    If you don’t file by then, the US Treasury will keep your hard earned money!

    Double check your State’s tax deadline

    Did you know that not every State has their tax deadline set for 15 April?

    If you’re obliged to submit a tax return for any of the following states, you’ll still have time to meet the deadline.

    • Iowa – April 30th 2019
    • Virginia – May 1st 2019
    • Louisiana – May 15th 2019

    How to tell if you owe money to the IRS or you’re due a tax refund

    Easy US tax filing

    Sprintax is the only online Federal and State self-prep tax software for nonresidents in the US.

    We take the stress out of US tax prep. Our system will assist you in preparing fully compliant Federal and State tax returns and also enable you to use any tax deduction and benefits you’re entitled to and maximize your legal tax refund.

    The average State tax refund that Sprintax customers received last year was $328.

    How Sprintax will help you?

    When you create your Sprintax account you’ll be asked a few easy questions. Once you complete the short form, you will then be able to download your fully completed and compliant 1040NR or 1040NR-EZ (nonresident tax return) based on the information you provided.

    Sprintax is also the ‘go-to’ tax preparation software for numerous major universities in the US including, Columbia University, Arizona State University, Illinois Institute of Technology and Cornell University.  We’re also the nonresident partner of choice for TurboTax.

    With Sprintax you can:

    • Save time and stress!
    • Determine your residency status
    • Prepare a fully compliant US tax return
    • Maximize your State tax refund
    • Avail of our 24/7 Vita Qualified Live Chat facility

    Prepare your US tax return today!

    Subscribe to the Sprintax Blog!

    US tax can be confusing. Especially for nonresidents!

    That’s why, if you’re an International Student or J-1 participant in the US, or you work in a University International Student Office, you should subscribe to the Sprintax blog.

    You’ll find tons of useful content for nonresidents. We cover tax, student life, acclimatizing to the US and much more.

    So what are you waiting for? Sign up today and never miss a thing!