US tax season survival guide – everything you need to know

US international student tax return

15 US tax questions answered for international students

Tax season is fast approaching and every international student in the US must file a tax return by the April 15 deadline(due to Covid-19 outbreak, the tax filing deadline has been extended to 15 July in 2020).

But which tax return should you file? Are you entitled to any tax credits or deductions? And what happens if you make a mistake on your tax return?

Here’s everything you need to know to survive tax season!

First off, do I have to pay tax in the US?

Yes! As an international student in the US, you will likely have to pay tax on the following types of income:

  • Wages and compensation
  • Salaries
  • Tips
  • Interest
  • Dividends
  • Some scholarships/fellowship grants
  • Prizes/awards

N.B. This will depend on your individual circumstances.

Do I have to file tax forms?

Yes! Non-resident international students studying in the US must at least file a Form 8843 with the IRS each year, even if you did not earn any income. It’s the law!

If you’ve earned income during the year, it’s likely that you will also have to file a Federal tax return.

When you file your tax return you must report all sources of your income to the government – including the tax you have already paid and what you still owe. It’s also an opportunity to claim any deductions that you may qualify for.

At the end of the process, you calculate the total tax you should have paid. If you paid more than what you owe during the year, you will be entitled to a refund. On the other hand, if you didn’t pay enough, you must pay the difference.

US tax questions answered Sprintax

I didn’t earn any income. Do I still have to file tax paperwork?

Yes. Even if you have not earned any income, if you have spent time in the US as a non-resident alien on an F or J visa, you must complete a Form 8843 and send it to the IRS.

Which tax form should I file?

As an international student it’s likely you will fall into the ‘non-resident’ tax category which means that the tax return you need to file is a 1040NR or 1040NR-EZ. Alternatively, if you have not earned any US income, you must complete a Form 8843.

When is the deadline to file my income tax returns?

The filing deadline for individual US Federal income tax returns is Monday April 15 (due to Covid-19 outbreak, the tax filing deadline has been extended to 15 July in 2020).

How can I determine my residency status?

It’s vital to determine your residency status in order to file a compliant tax return. The most common tax residency statuses are ‘resident’ and ‘non-resident alien’. Most international students who are studying in the US on F, J, M or Q visas are considered non-resident aliens for tax purposes. When you prepare your tax return with Sprintax, our software will determine your residency status based on the information that you provide.

Will the ‘Tax Cuts and Jobs Act’ affect me?

The ‘Tax Cuts and Jobs Act’ has wide ranging effects for all US taxpayers – particularly non-residents such as international students and those in America on a J-1 programme.

The primary change relates to the removal of what’s known as the ‘personal exemption’. This has lead to overall taxable income increasing for all non-residents.

Prior to the bill’s introduction, every non-resident who was working in the US was entitled to earn up to $4,050 without paying tax, through the personal exemption. However, the personal exemption was reduced from $4,050 to $0 in January 2018.

The removal of the personal exemption means that, for some non-residents, Federal tax refunds will be reduced. However, the US has tax treaties with over 65 other countries. International students and scholars can also potentially avail of these tax treaties when applying for their Federal tax refund.

Sprintax International Student tax returns

Do I need to file a State tax return?

Depending on your personal circumstances, you may also have to file a State tax return(s).

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

Sprintax can also help you to figure out whether or not you have to file a State tax return. In order to claim your tax refund you will first need to file your tax return.

What will I need in order to prepare my tax return?

In order to prepare your US tax return you will need:

(1) Your residency status

(2) Your Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN)

(3) Your income documents, of which there are 3 main types:

  • A W2 form (officially known as a Wage and Tax Statement) is an Internal Revenue Service (IRS) tax form used to report wages paid to employees and the taxes withheld. You should receive this from your employer at the end of January. It will state the previous year’s earnings and tax withheld
  • The 1042-S form (Foreign Person’s U.S. Source Income Subject to Withholding) is typically sent if you received some form of taxable scholarship from your school or institution, such as, for example, a stipend or housing allowance
  • The 1099 is less common, but you may have this if you received rental income, investment income or if you worked as an independent contractor

What happens if I don’t file a tax return?

If you don’t file a tax return, you may be subject to penalties and interest.

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

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

I filed an incorrect tax return last year. What can I do?

If you discover that you have filed an incorrect tax return, you will need to correct it by filing an amended tax return (generally Form 1040-X).

Sprintax can help you prepare your amended tax return – check our step by step tutorial on using Sprintax to amend your tax return.

I should have filed a tax return for last year. Can I file it now?

Yes, you should file your tax return as soon as possible. Sprintax can help you prepare overdue tax returns.

What is Sprintax?

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

When you create a Sprintax account, 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 that will allow you to maximize your legal tax refund.

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

Easy US non-resident tax

How can Sprintax help me?

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

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

Can I file my tax return with Turbo Tax?

Turbo Tax offer a service for US tax residents. Most international students are considered non-resident for tax purposes and so can’t file their tax return with Turbo Tax. Sprintax is the non-resident partner of choice for Turbo Tax.

Join the more than 250,000 people who have prepared their US tax return with Sprintax!

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!

Hey I'm Stacy! I'm dealing with US taxes and can't wait to help you prepare your tax return! I've been working with taxes for like forever, so you can totally trust my expertise. Sprintax can make things much easier for you. Check out my blog posts and feel free to ask me any questions.

Leave a reply.

* Copy This Password *

* Type Or Paste Password Here *