All posts by Kristina Valcheva

  • Which tax forms does Sprintax TDS support?

    tax forms Sprintax TDS supports

    Sprintax TDS is a secure hassle-free online software, which will help your institution to manage tax compliance for each of your nonresidents.

    In this guide, we are going to take a closer look at the many tax forms which can be prepared for your nonresidents using Sprintax TDS.

    Form W-4

    Every nonresident working in the US must complete a W-4 when starting a new job.

    This form is used to determine exactly how much tax should be withheld from the nonresident’s paycheck.

    Sprintax TDS enables nonresidents to complete their W-4 correctly and factors in all relevant tax credits and deductions.

    Form W-4

    1042-S

    If a nonresident receives any of the below forms of income, their tax withholder must provide them with a 1042-S before 15 March.

    • Scholarship
    • Fellowship
    • Grant
    • Teaching or research income (where exempt under a tax treaty)
    • Compensation during study and training (exempt by a tax treaty)
    • Investment income
    • Deposit interest on a US bank account

    Form W-8BEN

    Form W-8BEN

    Income earned by nonresidents in the US is typically taxed at a rate of 30%. However, the nonresident may be entitled to a reduction in tax by availing of tax treaty benefits.

    In order to claim tax treaty benefits, nonresidents must complete the form W-8BEN.

    Sprintax TDS will outline any tax treaties that are available to your nonresidents.

    Form W-8BEN-E

    Money generated by foreign businesses is also typically subject to a 30% tax rate. By completing a Form W-8BEN-E (also known as Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting), foreign vendors can avail of tax treaty benefits and a reduction in tax.

    Sprintax TDS automatically generates Form W-8BEN-E for foreign vendors.

    Form 8233

    Form 8233 must be filed by all nonresidents who earn a certain type of scholarship, personal services or fellowship income including compensatory scholarship or fellowship income from the same withholding agent.

    With this form, the nonresident aliens claim exemption from withholding for certain personal services, because of an income tax treaty.

    Sprintax TDS will enable nonresident users to complete their Form 8233 easily online.

    Form W-7

    Nonresidents can also apply for an Individual Taxpayer Identification Number (ITIN) with Sprintax TDS.

    Nonresidents will need an ITIN if they are not eligible to receive a Social Security Number, but they are eligible to receive scholarship payments.

    They also need to file a federal tax return with the IRS for income from US sources or if they are entitled to a refund of withheld taxes under a tax treaty. Form W-7 can be used to apply for a new ITIN if the existing one is expiring.

    Form W-9

    Form W-9 is used to provide and certify a Taxpayer Identification Number (TIN) and to verify that the nonresident is not subject to backup withholding.

    Typically this form is used when a person is required to report certain types of payments. It is also used by a third-party who should file an information return with the IRS. Form W-9 requests information from the taxpayer such as name and address.

    Form W-9

    Form SS-5

    Form SS-5 is a social security administration’s application document for requesting a social security card, whether it be a new card or a replacement one.

    The nonresident must provide certain documents that prove their identity, age, citizenship status and they must be the originals not photocopies (or certified by the agency that issued them).

    Want to learn more about how Sprintax TDS can help your payroll department?

    To find out more about Sprintax TDS, why not register for a free demo here.

     

  • 5 Painful payroll problems Sprintax TDS instantly solves for educational institutions

    Properly documenting and withholding the right amount of tax from nonresidents has become an increasingly important issue for educational institutions.

    International students come from a variety of different countries and spend different amounts of time in the US. So how can you manage all of your international students from a tax perspective when no ‘one-size-fits-all’ rule applies?

    Sprintax Tax Determination System (TDS) is a tool that ensures nonresidents are taxed correctly from their first day working in the US – guaranteeing that the right amount of tax is withheld from their earnings and reported to the IRS.

    A cloud-based payroll software, Sprintax TDS is already working with more than hundreds of educational institutions all over the US.

    How does Sprintax TDS work?

    The first point to note is that Sprintax TDS is completely cloud-based. No software installs are required. As soon as foreign nationals come into the campus, they are assigned an account on TDS.

    They answer a simple online questionnaire and, based on their answers, our payroll tool determines their residency status for tax purposes, as well as identifying what treaty benefits they are entitled to and whether they can avail of any deductions.

    Sprintax TDS also enables you to withhold the correct amount of tax from payments made to them.

    Finally, our software generates the relevant tax forms for the nonresident – including forms 1042-S, W-4, W-8BEN, 8233. It can also generate the W-8BEN E series if you are engaging with foreign vendors.

    When filling out our questionnaire, students can rely on an experienced Live Chat support team 24/7 who can answer their questions.

    When tax filing season comes around, students can transfer their data to the Sprintax tax preparation software. This will enable them to prepare their Federal and State tax return (and form 8843) easily online.

    How Sprintax TDS helps you solve payroll problems

    1. It saves time!

    It can be complex and time-consuming to determine how to individually tax each one of your international students and scholars.

    Sprintax TDS is a tool specifically designed to help schools withhold and report the correct amount of tax from US payments to nonresident students, scholars and professionals who are being paid scholarships, wages and stipends.

    2. It cuts out paperwork

    Our software Sprintax is an innovative, paper-free way to manage all tax-related forms.

    Instead of dealing with endless paperwork, Sprintax TDS allows you to store information securely in the cloud.

    The document exchange function allows your nonresidents to store and upload tax-related documents in a secure place that you can access as needed.

    3. Tax treaty research is a thing of the past!

    Forget spending hours leafing through the IRS website researching tax treaty agreements.

    You can easily determine whether your nonresidents are eligible for any tax treaties and deductions with Sprintax TDS. Our software also confirms whether or not the employee is a resident or nonresident for tax purposes.

    4. Forget archaic solutions! Sprintax TDS is a user-friendly, one-stop shop!

    The software highlights the tax status of your international scholars and students on a convenient admin dashboard and defines how they should be taxed on income from your institution.

    You can upload multiple users to the system or manually upload students by entering their name and email on the upload wizard. The users will receive a welcome email with a link to their TDS portal.

    You can see in real-time how many students have completed their accounts and view all the activity that is taking place in the system.

    Admins will also have reports and access to important payroll information such as tax residency status, country of residence, applicable tax treaties and their status on TDS.

    You can also generate your own individual report with the information you prefer. You will be able to choose the columns you wish to see and export the report into a CSV file.

    The administrator is able to access the student’s portal and edit the information on their profile, to make sure the information is correct. The system documents who was the last user to make any changes. The admin will also be able to generate a 1042-S form for each selected user.

    Admins can access a report of all payments per user, income code, dates, tax rates, tax calculated and all other information that the institution may need to review for each student. To make it even easier, all the information can be exported into Excel.

    The dashboard will also give you information about the students who have missing information and you will be able to send them reminders.

    Sprintax TDS resolves payroll problems

    5. We remove tax season stress!

    Each nonresident’s details can be transferred from Sprintax TDS into our tax preparation solution. This will enable each user to easily file their tax documents (Federal and State tax returns and form 8843) before the deadline.

    Want to learn more about Sprintax TDS?

    To find out more about how Sprintax TDS can help your payroll office, why not register for a FREE Sprintax TDS demo here.

     

     

  • How to Pay International Student Fees in the US

    international student making tuition payment securely

    Hey international students in the US! Got a college tuition payment coming up? Here’s how to transfer your fees the easy way

    Picture this.

    You’re busy taking notes during an important university lecture.

    And then your phone lights up.

    ‘Bing!’

    It’s time to pay your college fees.

    But as an international student, dealing with currency exchange and bank transfer fees can be a real headache.

    Don’t worry. We’ve put together this simple guide to help you pay your fees the easy way.

    (PSST: If you stick around to the end, we’ll even share some great tips to save you money on your tuition payments.)

    How to pay your international student tuition fees

     1.Traditional Bank transfer

    If you send money directly from your overseas bank account to pay your tuition fees, it’s important to be aware that this can be an expensive route to take.

    Banks can often offer uncompetitive exchange rates and charge high fees. If you are sending thousands of dollars, it’s important to find the most favourable option for your needs.

    What’s more, this service can also take several days to process. So, if you find yourself under pressure to send funds, the international bank transfer option can often leave you sweating

     2. International Bank Draft

    An international bank draft is used when you want to pay important bills in a foreign country. When you buy an international bank draft you put money on the counter or ask the bank to take them from your account.

    Then the bank converts it into whatever currency you need. Then you can send the bank draft in the payee’s local currency.

    Bank drafts are designed for the overseas transfer of large sums.

    While they are not the easiest to carry out, the good news is that this type of payment is accepted in the majority of countries around the world and is relatively inexpensive. Bank drafts are secure too.

    However, bank drafts typically take several weeks to process, so they are only an option if the time is not of the essence.

    3. University Online Payment Portal

    Even though many universities offer their own payment portals, this may not be the best option when it comes to saving money. When using this type of payment portal to pay your tuition fee, try to keep in mind that:

    • Paying the entire year of tuition instead of just one semester may secure you lower fees and stronger exchange rates. It’s a good idea to ask about discounts based on payment size.
    • If you find any links on Google or in emails for paying your tuition fee, do not click on them. Instead, always go to the official university website and click on the payment portal there.

    4. Cash

    Some educational institutions will accept cash payments.

    That said, this should probably be the last option you consider. After all, it’s not exactly convenient or secure to carry around large sums of money!

    If you decide to exchange money abroad, consider using a money transfer service which gives you the ability to pick up cash.

    Alternatively, if you choose to exchange in your own country and if travel internationally by plane, keep in mind that airlines have cash limits.

    5. Credit Card

    Want to pay for college with a credit card? The good news is that more and more colleges are now offering this option. The bad news? Many schools charge a fee for the convenience of using a credit card.

    In fact, a recent survey has found that, of the 300 largest US private, public and community schools, 255 schools (85%) accept credit cards for tuition payments – under at least some circumstances. However, among the schools that accept cards, 145 (57%) charge fees for card payments. The average fee is 2.62%.

    Most schools disclose these card fees on their websites, but the information isn’t always easy to find. If you choose this option, it’s a good idea to call the school to confirm transaction costs before you pay your tuition fees.

    6. Wire Transfers 

    A wire transfer (also known as money transfers, bank transfer or credit transfer) is any electronic transfer of money from one person or entity to another.

    Most people are daunted by the idea of sending wire transfer due to the amount of paperwork that must be completed.

    To get started, you will need to include:

    • Account holder’s name, institution number and mailing address
    • Branch number
    • Account number
    • SWIFT code and routing number (international wires)

    It is very important that you are aware of any wire transfer fees and the amounts vary if the wire is domestic or international.

    Wire transfer fees may vary depending on your bank and take 3 to 5 business days.

    Even though this is a secure way to send money, there are often scams involved when transferring a large amount of funds and you cannot reverse the transaction if you change your mind.

    How to pay your tuition fees the easy way – Secure Wire transfer

    The best way to pay for your tuition fees?

    Simple!

    With SprintPayments, you can send money directly to your institution securely online and on the go.

    Our solution eliminates bank transfer fees and you will enjoy unbeatable exchange rates too.

    The result? You save on every transaction.

    Payments are fully tracked from transfer to delivery, ensuring complete peace of mind.

    How does SprintPayments work?

    To get started, create your free account on SprintPayments.com.

    You will then receive a highly competitive exchange rate for that day – valid for 48 hours.

    Next, simply make the payment into your SprintPayments account in your local currency. The payment will immediately transfer to your institution’s US bank account.

    Why choose SprintPayments?

    You save money

    We have eliminated bank transfer fees and you will also enjoy unbeatable exchange rates.

    Safety and security

    This is a licensed and regulated payment solution that is trusted by banks and regulations worldwide.

    Flexibility

    You can pay via bank transfer or credit card.

    Fast service

    Payments are processed within 48 hours.

    Unrivaled customer service

    24/7 multi-lingual customer support and online tracking.

    To get started, simply create your SprintPayments account here.

     

  • What income is taxable for nonresident aliens in the US?

    Are you a nonresident living in the US? We know it can be confusing to understand the tax system in your home country, let alone in a different one, so we are here to help explain what income is taxable for nonresidents in the US.

    As a foreign national you can be subject to one of two different systems of taxation in the US, depending on whether you are classified as a nonresident or resident alien in the US.

    If you are a nonresident alien, you are subject to US income tax only on your US source income and just like residents, you must report your income on US income tax returns.

    In this guide, we are going to take a closer look at the various different types of income which are taxable in the US and outline our tips on managing your tax requirements.
    Continue reading “What income is taxable for nonresident aliens in the US?” »

  • Todo lo que un extranjero no residente de EE.UU. debe saber sobre el segundo cheque de estímulo

    Segundo pago estimulo banner

    ¿Recibiste los $600 del IRS? Esto es lo que debes saber

    A fines de diciembre, el gobierno de EE.U. autorizó al IRS a repartir la segunda ronda de pagos del ‘Economic Impact Payment’ a los contribuyentes – vía cuentas bancarias y cheques.

    El Coronavirus Response and Relief Supplemental Appropriations Act proporciona un pago de hasta $600 por persona elegible.

    Este es el segundo ‘stimulus payment’ liberado por el gobierno de EE.UU. y le sigue a los $1,200 CARES Act payment, que fue emitido en abril.

    Sin embargo, si recibiste el pago de $600 por parte del IRS, es importante tener en cuenta que no necesariamente tendrías derecho a él.
    Continue reading “Todo lo que un extranjero no residente de EE.UU. debe saber sobre el segundo cheque de estímulo” »

  • Filing taxes on H1B visa – the Ultimate guide

    filing taxes on H1B visa banner

    About H1B visa

    The H1B visa enables skilled workers with specialized expertise to live in the US for three years (later it can be extended for another three years), and work for a sponsoring employer.

    In order to apply, you need specialized knowledge and a bachelor’s degree or equivalent work experience in areas such as medicine, science, mathematics, information technology, architecture, finance, and accounting.
    Continue reading “Filing taxes on H1B visa – the Ultimate guide” »

  • FICA tax explained for nonresident aliens

    FICA tax exemption

    What is FICA tax?

    The Federal Insurance Contributions Act (FICA) is the means by which social security and medicare are funded in the US.

    FICA also provides benefits to children who have lost their working parents, widows and widowers, and disabled workers who qualify for benefits.

    For self-employed people, there is an equivalent law called SECA (Self-employed Contributions Act).

    Contributions to FICA are deducted from employee income. Many workers in the US will notice FICA being deducted from their income each time they receive their paycheck. Continue reading “FICA tax explained for nonresident aliens” »

  • The ultimate tax guide for international students on OPT

    What is OPT?

    Optional Practical Training (OPT) is an opportunity for international students under an F-1 visa to work in the US for 12 months. After this, STEM students (Science, Technology, Engineering and Mathematics) can extend this period up to 24 months.

    Most students complete OPT after graduating from university. Others participate after they have been pursuing their degree for more than nine months and are entitled to work and gain practical knowledge in the field of their studies. Continue reading “The ultimate tax guide for international students on OPT” »

  • Why are my federal wages different from my state wages?

    Sprintax W2 - Federal income higher or less than State income

    When preparing your tax return you will need to include some details from your income documents about the money you earned and tax you paid in the US.

    While it is not unusual for there to be differences between the taxation of federal and state income, it can be tricky for nonresidents to file their taxes in such cases.
    The easiest way to prepare your tax documents online is by using Sprintax.

    In this guide, we’re going to outline how you can enter your payment and tax details by completing Step 3 of the Sprintax tax prep process and what to do if you receive an error alert relating to your federal and state income. Continue reading “Why are my federal wages different from my state wages?” »

  • How to track the processing of your North Carolina state tax return?

    Check status of North Carolina state tax return

    North Carolina is one of the 43 states in America that taxes its residents’ individual income.

    You must file a state tax return if you are a nonresident alien and your income from North Carolina sources is greater than $0.

    If you have already filed your North Carolina state tax return ahead of the 15 July tax filing deadline, you may want to follow the progress of your return and the processing of your tax refund.

    In this guide, we’re going to show you exactly how you can track your return and let you know what to do if you have not yet filed your taxes.
    Continue reading “How to track the processing of your North Carolina state tax return?” »

  • U.S. entry and exit dates – how to check your travel history

    US entry and exit dates - check travel history

    In order to prepare your US tax documents, you will need to know the exact dates on which you travelled in or out of the US.

    However, if you don’t know your travel history and you need to double-check the exact entry and exit dates, the good news is that you can easily do this online.

    The US Customs and Border Protection (USCBP) keeps a record of all nonresidents who travel to the country over the past 5 years.

    These documents also include the reason for their travel and the dates of their previous visits to the US.

    In this post, we will discuss how to track all your travel history paperwork. Continue reading “U.S. entry and exit dates – how to check your travel history” »

  • Top Tax Tips for Last-Minute Filers

    student with laptop

    The US tax deadline may have been extended until 15 July, but many will inevitably wait until the last minute to file their tax returns.

    International students must file a tax return as a condition of their visa. You may be subject to penalties and interest if you don’t do it.

    If you’ve procrastinated and haven’t done your taxes yet, you are not alone!

    But don’t worry! We are here to help with our top tax tips for last-minute filers.
    Continue reading “Top Tax Tips for Last-Minute Filers” »

  • How to File Your Nonresident Tax Return from Outside the US

    Need to file a US nonresident tax return from outside America?

    Don’t worry. You’re not alone! Countless nonresidents face this very predicament every year.

    Filing from outside the US can pose its own unique set of challenges. But, with some planning, organization and a little help from your friends at Sprintax, filing your documents can be easier than you think!

    In this handy guide, we’ve got 5 top tips to follow if you’re filing your nonresident tax documents from outside the US.
    Continue reading “How to File Your Nonresident Tax Return from Outside the US” »

  • H1B VISA – All your questions answered!

    Sprintax_H1B_visa

    If you are an international student in the US on an F1 visa, you may wish to stay in the US to find work after you complete your course. You can do this by changing your F1 visa to a H1B visa (and later obtaining a Green Card).
    Continue reading “H1B VISA – All your questions answered!” »