Welcome to Sprintax’ comprehensive tax guide for J-2 visa holders in the US!
As a J-2 visa holder, it’s essential that you get to understand at least the basic aspects of your tax obligations and rights while living and working in the US.
After all, by not filing correctly, you risk incurring fines from the IRS. What’s more, if you’re taxes are not up-to-scratch, you may also encounter complications when applying for a visa or Green Card in future.
This guide will provide you with a clear understanding on such topics as your tax residency status, tax exemptions, FICA taxes, tax treaties, W-2 forms, and how to file your tax return at the end of the year.
It is important that nonresident aliens file their US tax documents to remain compliant with the IRS.
And when you sit down to file your end of year tax return you will need to have your taxpayer identification number (TIN) details close by.
In short, there are two types of Taxpayer Identification Numbers – the Social Security Number (SSN) and the Individual Taxpayer Identification Number (ITIN).
If you are not eligible for a SSN and have triggered a tax filing obligation, then you will need to apply for an ITIN. And exactly how to get your hands on an ITIN during tax season will be the focus of this piece.
While doing your taxes might not be the most exciting aspect of international student life in the US, the importance of filing your federal tax return correctly cannot be underestimated.
The topic of e-signatures on tax forms is a relatively new subject.
That is because the IRS has traditionally required paper signatures on all of their tax forms.
However, for some tax forms, the rules have changed somewhat over recent years.
This is due to a number of reasons, mainly due to the fact that the IRS is constantly looking to modernize the way in which they operate.
In this blog, we’ll delve into what the current rules on whether or not you as a nonresident alien on an F, J, M or Q visa can sign your tax forms online, and if it is beneficial for you.
What is an electronic signature?
An e-signature, also known as an electronic signature, is an efficient way to sign documents electronically with a digital ID.
Where does this apply to tax forms? Well, many tax forms can be completed electronically, but rules have stated that they need a paper signature.
However, the IRS has recognized that completing, printing, and sending tax forms is a significant burden as opposed to e-filing them, so they are beginning to change their rules.
The current law that allows e-signatures on tax documents is in place until 31 October 2023.
From the end of October 2023 onwards, it is likely that it will be extended.
What are the benefits of an electronic signature?
The main benefit of using an e-signature is that it saves time on tax return preparation for workers.
As well as this, when you apply an electronic signature to your document, it will lock it from further editing. This provides a safeguard against potential document manipulation after the taxpayer has completed the form.
They can also save you money, as every time you use an e-signature, it prevents you from having to print the document and ultimately spend more money on paper (and ink!).
How to add an electronic signature to a form
To add an e-signature to a tax form, you will need to try a software that offers this service. For example, DocuSign e-signature is officially recognized by the IRS.
The IRS states that it can accept two types of electronic signatures on tax documents:
Digital signatures: If you have software that allows you to sign documents digitally, you may do this – it is more secure than an image signature.
Imaged signatures: This is done by hand signing a form, scanning it, and saving it as an image.
What is a digital signature?
There are subtle differences between electronic signatures and digital signatures, despite how similar they sound.
Although both are used to add authenticity to documents, they perform different operations.
Digital signatures use technology to encrypt a signature – ensuring the person is not lying about their identity.
The difference is that e-signatures outline that a signatory is to be legally bound by the terms within a specific document.
Does the IRS accept electronic signatures?
Recently, the IRS has begun to lax its rules on tax document signatures.
For nonresidents, that applies to many of the common tax forms used in tax season.
To e-file your tax documents with Sprintax, you will need to electronically sign your forms using the information requested on the screen when you are finalizing your return.
Before signing your return, you must verify your identity with us. This will require you to provide information from your previous federal tax return (If you did not file a tax return for tax year 2020, please enter ‘0’ as your prior year adjusted gross income).
Next, you’ll be asked to agree to a disclaimer and consent statements before agreeing the information you entered is correct.
Finally, simply click ‘E-File My Return’ to electronically send your tax return to the IRS.
At the recent Nonresident Tax Clinic for J-1 visa holders, our panel of industry thought leaders explored the world of tax compliance and outlined the latest developments in rules and regulations for the taxation of J participants in the US.
This fascinating event was perfect for J program participants, J program sponsors, agents, responsible officers, employers of J visa holders or even if you simply have an interest in the J program.
