Top 8 tax myths international students in US believe in – DEBUNKED!
George Orwell once said: “Myths that are believed in tend to become true”.
Well, there might be a grain of truth in what he said but not when it comes to taxes and the U.S. taxation laws.
As an international student you are not supposed to know the US tax procedures concerning tax return filing by heart but at least you should be aware of the Top 8 tax myths that most international students tend to believe in.
So do not walk around believing in “old wives’ tax tales and check the most common tax myths DEBUNKED here!
Myth 1: International students do not have US tax obligations
Regardless of the fact that you probably do not classify as an U.S. citizen, you will still have tax obligations. Remember this!
International students have to file a tax return and pay tax in the USA.
“I didn’t have a job, I don’t need to file any tax forms“.
That is absolutely not true. Everyone needs to file at least the form 8843, so everyone has some obligation.
“I’m not from the US, I don’t need to file any tax forms“
That is not true. Just because you might not be a U.S. resident according to your visa status, this doesn’t mean that you do not have any tax filing obligations.
Myth 2: You can file your taxes any time during the year
You should complete and submit your tax documents to the IRS by 18 April 2022 for any income earned in the previous year. That means that tax returns for 2020 must be postmarked by 18 April 2022.
This is especially true if you owe tax – you may be subjected to fines and penalties the later you leave your tax filing.
If you do not owe any tax to the IRS, you can file at any time, but the earlier you file the quicker you’ll get your refund!
Myth 3: Not filing your tax return will not have any consequence for international students
As a nonresident alien you do have a filing obligation and the IRS definitely do audits and checks. The implications could be very serious down the road.
Even if you haven’t earned any income and therefore you do not owe any money to the IRS, not filing your taxes can still influence your future plans.
You are obliged to file your tax return by the U.S. law and not complying with the law may affect your future visa applications.
So why risk your visa status or even your permanent residency? Be sure to FILE your taxes!
What’s more, if you have received any income during the tax year you could be entitled to get some of the taxes you paid back.
If you do not file your tax return, you lose the opportunity to apply for your tax refund and get some extra money. Not to mention the penalties that IRS can impose on you.
Myth 4: Nonresident students can avail of the same tax credits and deductions as the residents
Unlike resident aliens who avail of the same tax benefits which are available to the U.S. citizens, nonresident aliens cannot claim the same tax credits and deductions; such as filing a tax return online or education credits, for instance.
But you can still be eligible to take advantage of ‘tax treaties’ signed between the United States and your home country, so make sure you check this.
Sprintax has all credits and tax treaties relevant to nonresident international students already built-in, making Sprintax the easy option for tax filing for nonresidents.
Myth 5: International students cannot file taxes electronically
Untrue!
That’s because Sprintax is now live for Federal E-Filing!
This means that by completing our easy questionnaire, you can file your tax return from the comfort of your own home.
E-file your international student tax return.
Myth 6: “My country is in a tax treaty with the US, so I don’t need to file”
The tax treaty is there to try and reduce the amount of tax that you have to pay while you’re in the US, but it doesn’t mean that you don’t have an obligation to file a tax return.
It’s definitely for your benefit, but it does not necessarily mean that you don’t have to file a tax return.
Myth 7: “International students won’t pay FICA taxes”
This is mostly true.
All students on F-1 and J-1 visa will be exempt from FICA taxes as long as they are deemed to be nonresident Aliens for Tax Purposes.
If you are on an F-1 or J-1 visa, you will be deemed a nonresident for tax purposes for the first 5 calendar years of presence in the USA.
Myth 8: “Only I can prepare my tax forms”
Untrue!
Sprintax Returns is here to help you prepare your US tax forms!
We’ll take care of preparing all the boring tax forms for you, and you can rest assured you’ll be 100% compliant with the IRS!
We’ll even ensure you receive your MAXIMUM legal tax refund.
So, why not leave the hard work with the experts and relax knowing you don’t have to prepare any boring tax work?
To be a non resident alien using OPT to work in US, do we need to report the 1099 INT, bonus or interest of the bank to the IRS?
Thanks in advance