All posts in Tax Tips

  • 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!

     

     

  • Where’s My Tax Refund?

    If you are due money back on your federal or state taxes, you ’ll want to know when you can expect that refund check or direct deposit to arrive. You can now get information about your tax refund(s) online. Read below to understand how it works.

    • Checking your Federal tax refund online

     The IRS has an online tool called “Where’s My Refund?” that allows you to check the status of your refund. When you go to the IRS website to get your tax return, the system will ask you for variety of information. Have a copy of your federal tax return on hand so you can enter the information easily. The system will ask for the following:

    • Your Social Security Number, or your Individual Taxpayer Identification Number
    • Your filing status (Single or Married Filing Separate Return for non-residents)
    • The exact dollar refund amount shown on your tax return

    Please have in mind before looking up your refund at Where’s my Refund that The IRS has advised you to wait 4 to 6 weeks after you mail your return.

    You can also check the status of your refund over the phone by calling one of the following numbers:

    • The first is the IRS Refund Hotline which can be reached at 800-829-1954. This number, available 24/7, is specifically for calls regarding tax refunds.
    • The IRS TeleTax system at 800-829-4477 provides general tax information as well as your current refund status. It is also available 24/7
    • Checking your State tax refund online

    You can check the status of your state tax refund using the online refund status tools on each state’s website. Click on the links mentioned below to go directly to your state’s refund status tool.

    Alabama (AL)

    The Alabama Department of Revenue has announced it will take 8-12 weeks to receive a refund from the date a return is accepted.

    To check the status of your Alabama state tax refund, go to My Alabama Taxes and then click Check on My Refund Status.

    For more information, contact the Alabama Department of Revenue.

    Alaska (AK)

    AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

    Arizona (AZ)

    The Arizona Department of Revenue has announced that the processing of a paper filed tax return can take up to 12 weeks to process.  For a refund to be direct deposited or mailed, it may take up to an additional seven days from the date the tax return completed processing.

    Click here to check the status of your Arizona state tax refund.

    For more information, contact the Arizona Department of Revenue.

    Arkansas (AR)

    The Arkansas Department of Finance & Administration has announced it can take approximately 6 weeks to receive a refund from the date a return is accepted due to enhanced security measures.

    Follow this link to check the status of your Arkansas state tax refund, and then click Where’s My Refund?

    For more information, contact the Arkansas Department of Finance and Administration (scroll down to the Individual Income Tax section).

    California (CA)

    The State of California Franchise Tax Board has announced it can take approximately 4 weeks to receive a refund (for paper filed returns). Some tax returns need extra review for accuracy, completeness, and to protect taxpayers from fraud and identity theft. Extra processing time may be necessary.

    Follow this link to check the status of your Arkansas state tax refund, and then click Check refund.

    For more information, contact the California Franchise Tax Board.

    Colorado (CO)

    Follow this link to check the status of your Colorado state tax refund, and then click Check the Status of Your Refund.

    For more information about refund processing click here or contact the Colorado Department of Revenue.

    Connecticut (CT)

    The Connecticut Department of Revenue Services has announced it can take 10 – 12 weeks to process a paper return.

    Follow this link to check the status of your Connecticut state tax refund, and then click Check on the Status of Your Refund.

    For more information, contact the Connecticut Department of Revenue Services (DRS).

    Delaware (DE)

    The Delaware Division of Revenue has announced it can take approximately 6 weeks to receive a refund from the date a return is accepted.

    Follow this link to check the status of your Delaware state tax refund.

    For more information, contact the Delaware Division of Revenue.

    District of Columbia (DC)

    The D.C. Office of Tax and Revenue has announced it can take 2 to 3 weeks for processing and issuance of a refund.

    Follow this link to check the status of your D.C. tax refund and click on the blue Where’s My Refund? button.

    For more information, contact the D.C. Office of Tax and Revenue.

    Florida (FL)

    AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

    Georgia (GA)

    The Georgia Income Tax Division has announced it can take 90 business days to process a return and issue a refund.

    Follow this link to check the status of your Georgia tax refund and click on the Where’s My Refund? button.

    For more information, contact the Georgia Department of Revenue.

    Hawaii (HI)

    The Hawaii Department of Taxation has announced it can take 9-10 weeks to process a return and issue a refund.

    Follow this link to check the status of your Hawaii tax refund and click on the Where’s My Refund? button.

    For more information, contact the Hawaii Department of Taxation.

    Idaho (ID)

    The Idaho State Tax Commission has announced it can take 10-11 weeks to process a return and issue a refund.

    Follow this link to check the status of your Idaho tax refund and click on the Where’s My Refund? button.

    For more information, contact the Idaho State Tax Commission.

    Illinois (IL)

    Follow this link to check the status of your Illinois tax refund.

    For more information or to contact the Illinois Department of Revenuer click here.

    Indiana (IN)

    The Indiana Department of Revenue has announced it can take approximately 10 weeks to process a return and issue a refund.

    Follow this link to check the status of your Indiana tax refund.

    For more information, contact the Indiana Department of Revenue.

     

     

     

     

     

     

     

     

    Iowa (IA)

    The Iowa Income Tax Department of Revenue and Finance has announced it can take approximately 3 weeks to process a return and issue a refund.

    Follow this link to check the status of your Iowa tax refund.

    For more information, contact the Iowa Department of Revenue.

    Kansas (KS)

    The Kansas Department of Revenue has announced normal processing time for a paper return is 16 weeks.

    Follow this link to check the status of your Kansas tax refund.

    For more information, contact the Kansas Division of Taxation for Individuals.

    Kentucky (KY)

    The Kentucky Revenue Cabinet has announced it can take 8-12 weeks to process a return and issue a refund.

    Follow this link to check the status of your Kentucky tax refund and click on the Check Refund Status online button.

    For more information, contact the Kentucky Department of Revenue.

    Louisiana (LA)

    The Louisiana Department of Revenue has announced the processing time for paper returns is 12-16 weeks from the date the return was mailed.

    Follow this link to check the status of your Louisiana tax refund.

    For more information, contact the Louisiana Department of Revenue or call 1-855-307-3893.

    Maine (ME)

    The Maine Revenue Services has announced that Maine tax refunds take up to 14 days to be processed.

    Follow this link to check the status of your Maine tax refund.

    For more information, contact the Maine Revenue Services Department.

    Maryland (MD)

    The Maryland Controller of the Treasury has announced that the processing of paper returns take approximately 30 days.

    Follow this link to check the status of your Maryland tax refund.

    For more information, contact the Comptroller of Maryland.

    Massachusetts (MA)

    Follow this link to check the status of your Massachusetts tax refund and click on the Where’s My Refund? button.

    For more information, contact the Massachusetts Department of Revenue.

    Michigan (MI)

    The Michigan Department of the Treasury has announced it can take approximately 8 weeks to process a return and issue a refund.

    Follow this link to check the status of your Michigan tax refund and click on the Check my tax and refund information button.

    For more information, contact the Michigan Department of Treasury.

    Minnesota (MN)

    The Minnesota Individual Income Tax has announced it can take approximately 6 weeks to process a return and issue a refund.

    Follow this link to check the status of your Minnesota tax refund.

    For more information, contact the Minnesota Department of Revenue.

    Mississippi (MS)

    Follow this link to check the status of your Mississippi tax refund.

    For more information, contact the Mississippi Department of Revenue.

    Missouri (MO)

    The Missouri Department of Revenue has announced it can take 8-10 weeks to process a return and issue a refund.

    Follow this link to check the status of your Missouri tax refund.

    For more information, contact the Missouri Department of Revenue.

    Montana (MT)

    The Montana Department of Revenue has announced it can take approximately 8 weeks to process a return and issue a refund.

    Follow this link to check the status of your Montana tax refund and click on the Where’s My Refund? button.

    For more information, contact the Montana Department of Revenue.

    Nebraska (NE)

    The Nebraska Department of Revenue has announced it can take 15-21 days to process a return and issue a refund.

    Follow this link to check the status of your Nebraska tax refund.

    For more information, contact the Nebraska Department of Revenue.

    Nevada (NV)

     AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

    New Hampshire (NH)

     AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

    New Jersey (NJ)

    The New Jersey State Department has announced it can take 12 weeks or longer to process a return and issue a refund.

    Follow this link to check the status of your New Jersey tax refund.

    For more information, contact the New Jersey Division of Taxation.

    New Mexico (NM)

    The New Mexico Taxation & Revenue Department has announced it can take approximately 8-12 weeks to process a return and issue a refund.

    Follow this link to check the status of your New Mexico tax refund and click on the Where’s My Refund? button.

    For more information, contact the New Mexico Taxation and Revenue Department.

    New York (NY)

    The New York State Processing Center has announced it can take 8-12 weeks after the return is mailed to issue a refund.

    Follow this link to check the status of your New York tax refund and click on the Where’s My Refund? button.

    For more information, contact the Department of Taxation and Finance.

    North Carolina (NC)

    The North Carolina Department of Revenue has announced it can take approximately 12 weeks to process a return and issue a refund.

    Follow this link to check the status of your North Carolina tax refund and click on the Where’s My Refund? button.

    For more information, contact the Hawaii Department of Taxation.

    North Dakota (ND)

    The North Dakota Office of State Tax Commissioner has announced it can take approximately 6 weeks to process a return and issue a refund.

    Follow this link to check the status of your North Dakota tax refund and click on the Where’s My Refund? button.

    For more information, contact the North Dakota Office of the State Tax Commissioner.

    Ohio (OH)

    The Ohio Department of Taxation has announced it can take a minimum of 30 days to process a return and issue a refund.

    Follow this link to check the status of your Ohio tax refund.

    For more information, contact the Ohio Department of Taxation.

    Oklahoma (OK)

    Follow this link to check the status of your Oklahoma tax refund.

    For more information, contact the Oklahoma Tax Commission.

    Oregon (OR)

    Follow this link to check the status of your Oregon tax refund.

    For more information, contact the Oregon Department of Revenue – Personal income tax.

    Pennsylvania (PA)

    The Pennsylvania Department of Revenue has announced it can take 3 to 4 weeks for the refund to be mailed or direct deposited.

    Follow this link to check the status of your Pennsylvania tax refund and click on the Where’s My Refund? button.

    For more information, contact the Pennsylvania Department of Revenue.

    Rhode Island (RI)

    The Rhode Island Division of Taxation has announced it can take 5 to 7 weeks to process a return and issue a refund.

    Follow this link to check the status of your Rhode Island tax refund.

    For more information, contact the Rhode Island Division of Taxation.

    South Carolina (SC)

    Follow this link to check the status of your South Carolina tax refund.

    For more information, contact South Carolina Department of Revenue.

    South Dakota (SD)

     AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

    Texas (TX)

     AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

    Tennessee (TN)

     AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

    Utah (UT)

    The Utah State Tax Commission has announced it can take 90 days to process a return and issue a refund.

    Follow this link to check the status of your Utah tax refund and click on the Where’s My Refund? button.

    For more information, contact the Utah State Tax Commission.

    Vermont (VT)

    The Vermont Department of Taxes has announced it can take approximately 8 weeks to process a return and issue a refund.

    Follow this link to check the status of your Vermont tax refund (click on Individuals and then click on the Check the status of my return button).

    For more information, contact Vermont Department of Taxes. 

    Virginia (VA)

    The Virginia Department of Taxation has announced it can take up to 8 weeks to process a return and issue a refund.

    Follow this link to check the status of your Virginia tax refund.

    For more information, contact the Virginia Department of Taxation.

    Washington (WA)

     AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

    West Virginia (WV)

    Follow this link to check the status of your West Virginia state refund.

    Wisconsin (WI)

    Follow this link to check the status of your D.C. tax refund and click on the Where’s My Refund? button.

    For more information, contact the Wisconsin Department of Revenue.

    Wyoming (WY)

    AlaskaFloridaNevadaSouth DakotaTexasWashington, and Wyoming don’t have income tax. If you received income such as wages, scholarship or any other earnings and/or income, you don’t need to file a return in that state.

    In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, scholarship, earnings, or other type of income.

     

  • What happens if I miss the April 18th, 2017 deadline?

    Don’t panic! This is IRS’ advice for you. Nearly 30% of the taxpayers are unable to organize their documents before the deadline. You still have the chance to solve your situation; however there are a few important things you need to consider if you expect to miss the deadline.

    If you are due back a refund or your tax return shows no tax liability

    If you are due back a refund or your tax return shows no tax liability, you may not be fined for filing late. If you’re due a refund, you should file as soon as possible to get it. Even if you are not required to do so, you may still get a refund. This could apply if you had taxes withheld from your wages or you qualify for certain tax credits.

    Sprintax will help you determine if you are due back a refund.

    Note that there is time limitation for you to file and receive your federal tax refund, so if you don’t file within three years from the due date of your tax return (18th of April, 2017 for 2016 tax year), you may not receive your refund.

    In addition, there are some tax refund policy changes for late filing taxpayers, that IRS is implementing, that may affect how quickly you will receive your refund.

    If you owe any money in tax

    If you owe any money in tax, keep in mind that both late filing and late payment penalties may be charged on top of your tax liability. The failure-to-file penalty is the bigger portion of your penalty,and after 60 days of delay its minimum amount will be $205, so if you have not filed form 4868 – Extension to file, you may need to submit your tax return to the IRS as soon as possible in order to avoid further increase of your fine.

    Your failure-to-pay penalty depends on the amount of tax you owe. The percentage of the penalty increases over time, so even if you are not ready with your documents, the more you pay on time, before the deadline, the less interest and penalty charges you will accrue.

    If you are unable to pay your tax on time, you have the choice to enter into installment agreement with the IRS. There are certain conditions you should meet and Sprintax tax experts will be able to help you if you choose to request installment agreement from the IRS.

    In conclusion, if you missed the deadline, the best thing you can do is to prepare your tax documents and file your tax return as soon as possible!

    Do not delay your tax return further! Sprintax can help you to prepare  it, and estimate if you owe tax to the IRS.

     

  • Sprintax Tax Workshop: Non-resident taxes explained (video playlist)

    Preparing your non-resident tax returns can seem like a daunting task! Sprintax has helped many international students and scholars through the process and is always striving to make their experience as stress-free as possible.

    Check out our Tax Workshop playlist – we explain the most important things you need to know about US taxes and using Sprintax:

    The tax deadline is April 18th, so don’t delay and create an account!

    If you still have questions, Sprintax offers 24 hour support to students via our Live Chat facility here.

    Have a question? Ask our virtual assistant Stacy here.

     

  • I am an international student, why don’t I get a full refund of taxes paid?

    Many international students on F-1, J-1, M-1 and Q engage in practical training and earn income through one of the USCIS (United States Citizenship and Immigration Services) approved programs or participate in on-campus and off-campus employment during or post-study.

    Do I need to pay tax?

    It is sometimes thought that foreign students who receive any type of income and funds from their OPT or from on-campus or off-campus activity, are not liable to US taxes however this is untrue. For many international students, the US tax system may seem complex and as a result they are not aware of their filing and taxation obligations.

    According to US tax law and regulations (Publication 519), “non-resident aliens usually are subject to US income tax only on US source income”, respectively, foreign students under F1, M1, J1 and Q visas are liable to pay both federal and state income taxes on their US sourced income, which may include wages, tips, scholarship and fellowship grants, dividends, and so on.

    Non-resident aliens file Form 1040NR-EZ or 1040-NR “US Non-Resident Alien Income Tax Return” to assess and file federal income and taxes. Most non-resident aliens do not qualify for the standard deduction.

    Tax Time post-it and Red Alarm Clock. 3D Rendering

    Do I need to file a tax return?

    If your gross earned income from sources within the US does not exceed the personal exemption allowance ($4,100 in 2016), a federal income tax return is not due and any federal tax withheld will be refunded in full.

    Scholarships and Fellowship Grants are also taxable income when paid to non-resident aliens. IRS Notice 87-31 exempts scholarships and fellowships from tax in the US when paid to US citizens and residents, yet the US scholarship and fellowship grants paid directly to a foreign student are generally taxable and subject to reporting.

     

    Can I deduct expenses?

    The general rule is that you cannot deduct personal or living expenses, unless specifically allowed by the US tax code. Some foreign students are eligible for a direct write-off of that part of the scholarship or grant that was used to cover qualified educational expenses. The deduction applies to all non-resident aliens who are candidates for a degree or at least half-time students.

    The qualified educational expenses also include all out-of-pocket expenses paid for tuition, academic fees, books, supplies and equipment required by a college or university.

     

    property-tax-deduction-america-stay-9wVeRF-clipart

     

    What is a tax treaty?

    Another way for international students to decrease federal income tax is to avail of a tax treaty which will allow them to fully or partially exempt their US sourced income from federal and/or some state income taxes.

    The US tax treaty network covers more than 65 countries and almost all treaties have specific provisions that apply to students, trainees and apprentices.

    In conclusion, foreign students are liable to pay US income taxes on the income they earn in US, including wages, tips, scholarship and fellowship grants, dividends, and must use non-resident tax return forms 1040NR-EZ or 1040-NR to calculate the amount of federal income tax they must pay.

     

    Am I due a tax refund?

    If the amount of tax deducted from your payments during the tax year 2016 is more than the tax shown on your 1040NR-EZ or 1040-NR, then you will be due a refund, otherwise you will be required to pay your US tax liabilities.

    It is important to note that each individual state has its own tax system and tax regulations imposing different residency and filing requirements under which foreign students may have to a file state tax return and pay state income tax even when no federal return is due.

     Claiming-a-tax-refund-–-explained-step-by-step

    Preparing your tax return online

    Sprintax.com offers you non-resident tax form preparation online through a simple step-by-step process. The software analyzes personal, income and tax information and produces non­-resident tax forms such as 1040NR, 1040NR-EZ, more than 10 state tax returns, including CA, NY, MI, IL, PA, MA, NC, NJ, VA, GA and many others, including the 8843 form and W-7 ITIN application where applicable.

    Through the user-friendly, step-by-step application, the software collects data that considers your allowed expenses, tax treaty benefits, deductions and exemptions helping you to prepare a compliant tax return and reduce your income tax liability as much as is legally possible.

    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.

     

  • Tax Treaties: What’s The Deal?

    US Flag

    If you’re an international student in the US, a tax treaty could mean excellent news!

    Under these treaties, residents of foreign countries are:

    • Taxed at a reduced rate
    • Exempt from US on income derived from specific sources earned within the US

     

    Is your country in blue? Then it has a tax treaty with the US:

    tax Treaty

    If your country does not have a tax treaty with the US or the treaty doesn’t cover they type of income you earn, then you must pay tax on this income.

     

    Saving Clause

    Most tax treaties have a clause that preserves the right of each country to tax its own residents, so once you become a resident of the US, you will lose most of the tax treaty benefits. However, many treaties still allow you to claim certain benefits even if you become a US citizen or resident.

     

    Non-Resident Aliens

    If you are a non-resident alien, like most international students, a tax treaty will eliminate or reduce taxes on certain income and services, including; pensions, interest, dividends, royalties, and capital gains. For students, apprentices, and trainees, the limit to the benefits of the tax treaties is 4-5 years. For teachers and professors, the limit is around 2-3 years.

     

    Requirements

    You must meet certain requirements to avail of the benefits of a tax treaty:

    • Requirements as laid out in IRS Publication 901 (pdf)
    • You should have Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
    • Complete the correct tax treaty exemption forms

     

    You can view the text of each treaty on the IRS website here.

     

    How Sprintax can help?

    When you do your online tax return with Sprintax, we will automatically check if you can avail of any tax treaty benefits, thus increasing your chances of a higher tax refund!

     

    Find out more here.

  • 10 Quick Tax Tips!

    us tax tips

    Studying in the US? You’re required by US taxation law to file a tax return so here are 10 tips to help your taxes go smoothly!

     

    1.You should submit your tax documents to the IRS (Internal Revenue Service) by 15 April for any income earned in the previous year (the 15 April deadline may be extended to accommodate holidays or weather conditions).

     

    2. You may be able to take advantage of a ‘tax treaty’ between the US and your home country, so make sure you check this as it could mean you pay less tax! Sprintax can also check for this when you apply.

     

    3. As a non-resident alien, even if you don’t need to file a US income tax return, you still must file a Form 8843.

     

    4. Students in F-1 and J-1 status are generally considered Non Resident Aliens (NRAs) for the first 5 years in student status, including the tax year (January 1 – December 3). In the 6th year, they become a resident for tax purposes. Scholars in J-1 status are typically considered NRAs for the first 2 years (for example, scholars who arrived in 2015 or later are non-residents for the 2016 tax year).

     

    5. If you have any source of US income, you must declare it on your US tax return.

    Sources of income include:

    • On-campus/off-campus employment
    • Scholarship/fellowship grants/stipends
    • Graduate or teaching assistantships
    • Salary for a teaching or research appointment

     

    6. Documents you’ll need for your US tax return:

    • Passport
    • Visa info (Form DS-2019 or Form I-20)
    • Your Tax Identification Number or Social Security Number (not required if you’re just filling Form 8843)
    • All U.S. entry and exit dates

     

    7. You’ll also need certain tax forms:

    • Your W-2: This form reports your income earned from your employer
    • 1042-S: This reports scholarships, fellowships, grants paid to you.

     

    8. You can still file your tax return after the April deadline and don’t worry about penalties and fines if you have no tax liability. However if you own money to the IRS, you may incur late filing fees and/or penalties.

     

    9. You cannot file your non-resident tax return online, but Sprintax can help you fill in all the information online and will give you instructions on where to mail it.

     

    10. Need to file a US tax return? To get started with your U.S. tax return, click here to create an account!

  • Form 8843 Explained

    Form 8843 US tax

    As a non-resident alien, even if you don’t need to file a US income tax return, you still must file a Form 8843. So what’s it all about?

    What is a Form 8843?

    8843

    (extract of form)

    A Form 8843 ‘’Statement for Exempt Individuals with a Medical Condition” is not an income tax return, it is a statement you file for the US Government if you are a certain non-resident alien (including spouses/dependents of certain non-resident aliens).

     

    Who must file a Form 8843?

    Non-residents aliens in the US under F-1, J-1, or J-2 non-immigrant status are required to file a Form 8843, even if you had no income in the previous tax year.

     

    You must file a Form 8843 if:

    • You were present in the US in the previous tax year
    • You are a non-resident alien
    • And you are in the US under F-1, F-2 or J-2 status.

     

    Even if you don’t need to file an income tax return, you should file the Form 8843 if the above criteria apply.

     

    How do I fill it in?

    Here is the Form.

    Part 1:

    • Fill in your details accurately including your name as it appears on your passport.

     

    • If you have a social security number (SSN) or individual taxpayer identification number you should include it. You generally don’t need an SSN or ITIN to file a Form 8843 but if you have been assigned one, you must include it on Form 8843. The exception to this is for those who can be claimed as dependents on a US tax return. These dependents must have either an SSN or ITIN.

     

    • Enter the type of visa you’re on in the US (F-1, J-1, etc.).

     

    • Enter your current non-immigrant status, unless this has changed since you entered the US. In this case you should also enter the date your change of status was approved.

     

    • Enter the number of days you were present in the US in the last 3 calendar years.

     

    • In the box on the substantial presence test, enter the number of days that you were in the US in the tax year.

     

    Part 2

    For teachers and trainees, answer the questions according to your personal circumstances and include the details of what academic institution or programme you were involved in the previous year.

     

    Part 3

    If you are an F-1, J-1 (and dependents), you should fill in this section.

    • Include details of the academic institution or programme
    • Answer the rest of the questions according to your personal circumstances

     

    Part IV and V

    These parts don’t apply to those in the US on F or J non-immigrant status so you don’t need to fill these in.

  • Your Free Guide to Studying in the US

    Check out how Sprintax works

    Considering embarking on an academic course in the US?

    Being an international student in the US can be a hugely rewarding experience. If you’re wondering how to go about it or just looking for tips, then you should download our free PDF guide straight to your PC or smartphone.

    Topics include:

    • How to get a scholarship
    • Getting your visa
    • Where to go
    • Accommodation in the US
    • Eating on a Budget
    • US Tax Tips
    • Getting a Job
    • Student Life
    • And much more!

    Simply fill in the form below to get your free guide!