All posts in Sprintax

  • My state residency differs to my federal residency. How is this possible?

    We’re here to clear your residency confusion!

    All Foreign Nationals living, working or studying in the US are responsible for their personal compliance with the United States Federal and State tax laws and regulations.

    But what are these laws and regulations?

    Well, for starters, every foreign national living in the US is required to submit an annual income tax return. But the type of tax return you will need to file depends largely on where you live and work.

    In the US, Federal income tax is collected by the Internal Revenue Service (IRS). Most States (42 States plus the District of Columbia to be exact!) also have additional State income tax which is collected separately by the various state authorities. People that live in one of these 42 States may be required to submit a State return in addition to the Federal return.

    To file correct tax returns, it is important for a foreign national to recognize how the IRS and the different State tax offices determine tax residency.

    File your US tax returns with Sprintax

    Federal residency

    The IRS tax code provides two separate tax reporting requirements – one for US citizens and resident aliens and another one for non-resident aliens.

    Before a non-citizen of the US prepares and submits a tax return to the IRS, they must determine their correct residency status.

    But how can you do this?

    Well, the IRS has two tests for determining residency status: the ‘green card’ test and the ‘substantial presence’ test (SPT).

    Substantial presence test

    The substantial presence test (SPT) identifies foreign individuals who spend substantial periods of time within the United States as resident aliens.

    You will be considered a ‘resident for tax purposes‘ if you meet the SPT for the previous calendar year. To meet this test, you must be physically present in the United States for at least:

    • 31 days during the current year, and
    • 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
      • All the days you were present in the current year, and
      • 1/3 of the days you were present in the first year before the current year, and
      • 1/6 of the days you were present in the second year before the current year.

    Students on F-1 and J-1 status are typically considered non-resident aliens for Federal tax purposes for the first 5 years in student status.

    On their 6th year they can begin counting days of presence for the SPT. If they pass the test – their status changes from non-resident to resident for tax purposes.

    Scholars, interns and trainees, teachers, researchers and research-scholars on J-1 status are considered non-resident aliens for Federal tax purposes for their first 2 years in the US.

    However, on their 3rd year, they can also begin counting days for the SPT. And if they pass the test – their status changes from non-resident to residents for tax purposes.

     Other non-immigrant statuses are also dependent on the substantial presence test.

    Green card

    A green card is simply an informal term for a United States Permanent Resident Card. But how can you get one? In reality, the green card test is actually pretty straight forward.

    A non-resident alien can become a US resident for tax purposes at any time if they have been given the privilege, according to immigration laws, of residing permanently as an immigrant. This status usually exists when the Bureau of Citizenship and Immigration Services issue an Alien Registration Receipt Card (Form I-551), or green card, to an individual.

    Should you qualify for a green card, you will automatically become a US tax resident, starting from the year you first qualified.

    State residency

    It’s important to note that, State and Federal residency are not the same thing.

    Each State follows an entirely different set of rules and regulations when determining state residency status.

    So even if you are a non-resident for federal tax purposes you may be a resident for state tax purposes.

    Because the rules and regulations vary by state, determining state residency is more complicated than it seems.

    Each state has a complex and differing definition of what constitutes a resident. Most states will look at a list of residency ‘factors’ that have been long established like domicile (permanent residency), or the day counting rule. Owning a home, family location, and financial interests are other factors which help some of the states determine residency.

    In other words – a person may be considered a resident of the state in which he or she currently lives because of the state residency factors, but still be considered a non-resident for federal tax purposes because they didn’t pass the SPT or the green card test.

    Sprintax can help you determine your residency status

    To make things even more complicated, some States have a third residency status (in addition to ‘resident’ and ‘non-resident’) which is called ‘part-year resident’.

    And, for people who live or study in one state and work in another, things can quickly become tricky as they might need to file more than one State tax return and they will need to determine their State residency for both States!

    Preparing your tax return

    Sill confused? Don’t worry! Sprintax will figure out both your Federal and State residency statuses so that you don’t have to. We will also prepare your Federal and State tax returns, regardless of your State residency status!

    Sounds great! Get me started!

  • Can I claim tax exemptions for my family members?

    Everything you need to know about tax exemptions and deductions for families

    If you’re studying or working in America with your family as a non-resident alien, and if you meet certain criteria, you may be able to save money on your tax bill that you normally couldn’t if you were living as a single person.

    You can do this by claiming what are known as tax ‘exemptions’. Exemptions are similar to tax deductions and allow you to lower your taxable income. Each exemption is worth $4,050 (for tax year 2017). In other words, if you’re a student, scholar, teacher or researcher, you may be allowed to deduct $4,050 for each person you claim as a dependent.

    When you are preparing your income tax return there are two different types of exemptions that you may be allowed to claim:

    • Personal exemptions for yourself and your spouse, if applicable
    • Exemptions for dependents (usually family members)

    The general IRS rule states that a non-resident alien, whether single or married, may claim only one personal exemption, as long as they are not claimed as a dependent on any other US tax return (in which case their personal exemption was already used).

    There are some exceptions to the general rule which allow specific groups of taxpayers to claim dependent exemptions for their family members:

    • Residents of Canada or Mexico, or US Nationals, may claim additional exemptions for a spouse and dependents if:

    o the spouse had no gross income;
    o the spouse was not the dependent of another US taxpayer; and
    o the dependents otherwise qualify as dependents under the normal rules.

    • Residents of the Republic of Korea may claim additional exemptions for a spouse and children if:

    o they meet the same 3 conditions shown above for residents of Canada or Mexico, and US Nationals;
    o the spouse and all children included in the claim have lived with the taxpayer for at least 6 months during the tax year;
    o the additional deductions for the spouse and children are distributed based on the ratio of the alien’s US income (from a US trade or business) and worldwide income (from all sources). Sprintax will estimate this ratio for you.

    • Residents of India who are students and business apprentices may claim exemptions for a spouse and children under US-India tax treaty agreement if:

    o the spouse had no income and can’t be claimed by another taxpayer; and
    o the children meet ALL dependency tests, including the citizenship/residency test.
    That is, a non-resident alien Indian Student can’t claim a dependency exemption for his child unless the child is a US citizen or a resident.

     

    The additional deductions for the spouse and children in all cases are limited to the extent of the alien’s taxable income.

    To determine if your child is a qualifying child for tax exemption, you’ll need to answer the following questions.

    Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, adopted child or an offspring of any of them.
    Are they a citizen or resident? The person must be a US citizen, a US national, a US resident, or a resident of Canada or Mexico.
    Note: children and spouse of a citizen of India or Korea must be either US national, Green Card holder or must meet Substantial Presence Test in order to qualify.
    Do they meet the age requirement? Your child must be under the age of 19 or, if they are a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.
    Do they live with you? Your child must live with you for more than half the year.
    Do you financially support them? Your child may have a job, but that job can’t provide more than half of their support.
    Are you the only person claiming them as a dependent? You can’t claim someone who takes a personal exemption for themselves or claims the same dependent on another tax form.
    Are they filing a joint return? You cannot claim someone who is married and files a joint tax return.
    For example, if your son is married and he files a joint return with his spouse, you will not be able to claim him as a dependent on your tax return.

    If you’re unsure of whether you can claim a loved one as a dependent, Sprintax can help you to ascertain if you have an eligible dependent.

    And no matter whether you’re a student, scholar, teacher or researcher, Sprintax can help you to:
    – Prepare your non-resident US tax return
    – Select every deduction you are entitled to
    – Identify all applicable tax treaty benefits you are able to claim, so you can get your maximum US tax refund!

    Apply today!

     

     

  • Sprintax at NAFSA 2017 Annual Conference & Expo

    Our Sprintax team is thrilled to be attending the 2017 NAFSA conference!

    This year the annual conference & expo is taking place in Los Angeles, California and is attended by international education professionals from more than 150 countries.

    NAFSA’s annual conference provides unique opportunity for those interested in international education to develop their knowledge, skills, and ideas and engage effectively with colleagues from around the globe. Furthermore, visitors can gain valuable insights on all areas of international education, student services, and research from a global perspective.

    We are delighted to meet many of our partners and discuss new strategies on working together in the future, as well as exchange experience and information with experts and innovators in the sphere of education.

    The whole Sprintax team are looking forward to working together to help even more international students and scholars with their US tax affairs.

    Our booth is 1849, so please stop by and say hello if you are in the area! 

     

  • Massachusetts state tax module for 2016 tax preparation is live!

    We are happy to announce that the Massachusetts state tax module is live!

    MA modules for non-resident, part-year residents and full-year residents are now available for use.

    In addition to the MA module, we have 9 more state modules available. You can prepare and download your 2016 tax returns for New York, California, Rhode Island, North Carolina, Michigan, Ohio, Virginia, Indiana and Missouri.

    International students and scholars and non-resident professionals can prepare their tax returns by entering their existing account or creating a new one for new users of Sprintax.

    You may or may not be obliged to file a state tax return for 2016 – Sprintax will help you to identify your state tax filing obligations and prepare your state tax return if required.

    The tax deadline for most states is April 18, so don’t delay!

    Sprintax offers 24 hour support to students via our Live Chat facility to answer any questions you may have here.

    Have a question? Ask our virtual assistant Stacy here.

  • NY, RI, NC, MI, OH state tax modules for 2016 tax preparation are out!

    Following the release of 4 state tax modules in January (California, Virginia, Indiana and Missouri), we are happy to announce that five more modules are available!

    You can now prepare and download your 2016 tax returns for New York, Rhode Island, North Carolina, Michigan and Ohio.

    International students and scholars and non-resident professionals can prepare their tax returns by entering their existing account or creating a new one for new users of Sprintax.

    You may or may not be obliged to file a state tax return for 2016 – Sprintax will help you to identify your state tax filing obligations and prepare your state tax return if required.

    The tax deadline for most states is April 18, so don’t delay!

    In addition to the 9 available states, we expect more state tax modules to be released, so please stay tuned:

    Pennsylvania, New Jersey, Georgia, Oregon, Kansas, Massachusetts, Colorado, Illinois, Maryland

    Sprintax offers 24 hour support to students via our Live Chat facility to answer any questions you may have here.

    Have a question? Ask our virtual assistant Stacy here.

  • First four state tax modules for 2016 tax preparation are out!

    We are very pleased to announce that the first four states tax modules for 2016 tax preparation are out now.

    You can prepare and download your 2016 tax returns for California, Virginia, Indiana and Missouri by entering your existing account or creating a new one for new users of Sprintax.

    You may or may not be obliged to file a state tax return for 2016 as well as a federal tax return. However, Sprintax will help you to identify your state tax filing obligations and prepare your state tax return if required.

    Most state tax authorities adopt the federal tax season deadlines, so you may need to submit your state tax return(s) by the April 18 deadline, the same as your federal tax return.

    By the end of January, we expect the state tax modules for most of the following states to be released, so please stay tuned:

    Massachusetts, Michigan, Georgia, Illinois, New York, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Colorado, Kansas, etc.

     Sprintax offers 24 hour support to students via our Live Chat facility to answer any questions you may have here.

    Have a question? Ask our virtual assistant Stacy  here.

  • 2016 Tax Season A Fantastic Success!

    With the 2017 tax filing season open, it’s time to take a look back at the 2016 season and what we achieved.

    Successful season for Sprintax

    The 2016 tax season saw a huge increase in the number of students and scholars using Sprintax to prepare their Federal and State tax returns.

    With a similar increase in contracted colleges and universities for 2017, we are expecting this to be another record year.

    In 2016 the average Federal refund was over $900, and while everyone’s circumstances are different, the vast majority of those who prepared a Federal return received a refund – so it does pay to file your taxes!

    Communication with clients and partners

    At Sprintax we strive to provide our clients the highest quality service and their feedback is vital to achieve this. In 2016, we launched our Customer Satisfaction Survey for the 2nd year and were delighted with the positive results.

    In 2016, the Sprintax team attended the NAFSA conference in Denver, as well as the regional NAFSA conferences, where we had the pleasure of meeting many of our colleagues and partners.

    Our goals for the future

    We’re committed to making tax preparation as stress-free as possible. Our team are on hand to answer any questions you may have when preparing your returns. Simply ask a question here.

    The filing deadline is Tuesday April 18, but the sooner you file the sooner you get your refund, so don’t delay!

    Click here to sign up!

  • The 2016 Tax Year is Live!

    We’re excited to announce that the 2017 tax filing season is open and Sprintax is up and running!

    International students and scholars, and non-resident professionals – you can now use Sprintax to prepare your non-resident tax returns for the 2016 tax year. Sprintax can help you prepare your Federal, State, and FICA tax returns to ensure you stay fully compliant.

    Official start of 2017 filing season

    The 2017 filing season starts on January 23 2017. Sprintax gives you the opportunity to prepare your tax return before that date and have your 2016 tax return ready to mail on or after January 23, at the start of the 2017 Filing season.

    April 18 Filing Deadline 

    The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017, rather than the traditional April 15 date. In 2017, April 15 falls on a Saturday, and this would usually move the filing deadline to the following Monday — April 17.

    However, Emancipation Day — a legal holiday in the District of Columbia — will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 18, 2017.

    What does the April 18 deadline mean to me?

    Non-residents can apply for their tax refunds even after the April 18 deadline, but your return has to be filed no more than 3 years after the original deadline in order for the IRS to issue you a refund.

    You should not worry about penalties and fines if you have no tax liability as the IRS may not penalize you if you do not file a return on time.

    The deadline for filing your Form 8843 is the same as the deadline for filing your tax return (April 18).

    If you owe additional tax for the year, you must file your tax return and pay those taxes by April 18 to avoid late filing and payment interest and penalties.

    How Sprintax works

    To get started, simply create an account here. Sprintax will give you a step-by-step guide to the whole process – all you need to do is answer a few simple questions.

    Once you’re done, Sprintax will generate your tax return/s and you can simply send it to the tax office – it’s as easy as that!

    Once complete, we’ll store your details for any future tax returns. You can also prepare tax returns for previous years using the same account.

    Sprintax offers 24 hour support to students via our Live Chat facility to answer any questions you may have here.

    Don’t miss out on your tax refund and stay compliant by using Sprintax!

    Have a question? Ask our virtual assistant Stacy here.

  • Sprintax at NAFSA 2016 Regional Conferences

    Following the national conference earlier in the year, the 11 NAFSA regions held their conferences in late October and early November. These events are excellent opportunities for those involved in international education and exchange to network with experts and business partners and stay current with the latest trends.

    Sprintax were delighted to attend again and meet many of our partners and colleagues. We were represented by Jennifer Gallagher in Alaska, Wisconsin, California and Indiana and Enda Kelleher in Rhode Island, New York, New Mexico, Louisiana and Pennsylvania.

    Enda and Jennifer had statistics from the 57,000 students and scholars who prepared their taxes with us and were glad to offer advice and information to anyone who stopped by their booths.

    Sprintax Competition

    This year, we continued our tradition of giving away prizes at NAFSA. Enda and Jennifer ran a draw for a Bluetooth speaker for all of those who stopped by to chat with them.

    The lucky winner from the conference in New Orleans was Joy Werka from University of West Alabama, while Kelly Hughes from Towson University got the prize at NAFSA Philadelphia. Congratulations Joy and Kelly!

    IMG_3967

    Enda from Sprintax team and Joy from University of West Alabama

    We were thrilled to be part of the NAFSA regional conferences and we’d like to thank all participants for the wonderful experience! NAFSA is helping to shape the future of education and we look forward to attending more events.