All posts in Sprintax Returns

  • 23 tax tips for nonresidents to maximize their US tax refund in 2023

    U.S. nonresident tax-refund tips for 2023

    Taxation in the United States is unique and complicated, especially if you are a nonresident. Maybe you have a lot of questions when you complete your tax return and don’t want to pay a cent more than you have to.

    This is where this blog may help you.

    Here are 23 tax tips that can answer your questions and help you trim your tax bill and maximize your US tax refund in 2023.

     

    1. Remember! You have to file a nonresident tax return in the US

    If you are a nonresident alien living and working in the United States, you must file an income tax return. This applies to all nonresident aliens studying there on an F Visa, J Visa, M Visa, or Q Visa.

    The easiest way to file your US nonresident income tax return is online with Sprintax or by mailing a paper return (Form 1040-NR) to the Internal Revenue Service.

    Sprintax is now approved by the IRS to submit Federal tax returns online (E-Filing). In short, you no longer have to download, print, and mail a physical copy of your tax return to the IRS.

     

    2. Yes – even if you did not earn US-sourced income, you may still have a filing requirement

    If you earned income, you have to file a non-resident income tax return on Form 1040-NR. If you did not earn any income you may need to file a Tax Form – 8843.

    Each individual who is a nonresident alien and is present in the United States under an F, J, M, or Q immigration status (both “-1” and “-2”) is required to file Form 8843, regardless of age or income received.

     

    3. Yes, you must file if you were self-employed or earned income from investments or cryptocurrency

     If you have made a profit from trading cryptocurrency on a US exchange or broker while living in the US, you are required to declare that income.

    The IRS treats cryptocurrency as property, and any profit made from it will be subject to Capital Gains Tax at 30% and must be reported on your 1040-NR tax return.

    However, if you dispose of your investment for a loss, you will not need to pay tax, but as a nonresident, you will not be able to use the losses to offset any future tax liabilities.

    The same applies to investment profit. Dividends received from your investments will also be subject to a 30% tax. Keep in mind that you may be eligible for a reduced tax rate or tax exemption if you are able to claim tax treaty benefits

     

    4. Correctly determine your tax residency status

    As an international student, if you work in the United States you will be taxed, but the extent to which you are taxed will depend on your residency status and where your income, whether from employment or capital gains, was earned or sourced from.

    Not all nonresident aliens will meet the residency requirements for filing a US income tax return.

    You are only considered a US Resident if you:

    1. Have been issued a Green Card, or
    2. Meet the Substantial Presence Test guidelines, which state that you have been in the US for at least 31 days in the current year and 183 days in the previous two years.

    If you struggle with determining your residency status, don’t forget that Sprintax allows you to complete the substantial presence test and determine your tax residency status for free!

    Determine my residency status

     

    US nonresident alien tax refund tips

    5. Figure out your tax obligations

     Nonresident students are generally taxed on their US source income, such as wages or salaries earned in the United States which includes money earned while in the country.

    The IRS, on the other hand, has no authority to levy taxes on income earned by nonresidents in their home countries or any other foreign country.

    You may also be required to file a nonresident tax return if you receive certain types of income, such as wages, scholarships, fellowships, rental income, interest, dividends, and grants. However, certain types of income may be exempt from income tax, such as gifts, bequests, and inheritances.

    Read more: US tax season survival guide for international students on F-1 visas

     

    6. You must also file if you received a gift or inheritance

    Gifts and inheritances may be taxable to the donor or tax-free, depending on the amount of the gift or inheritance and the relationship between the donor and the recipient.

     

    7. Consider the tax implications of receiving a scholarship or fellowship

    Scholarships and fellowships may be taxable or tax-free, depending on the terms of the award and how the funds are used. It’s the same with grants.

     

    8. Be aware of the tax implications of on-campus employment

    While studying, international students may be allowed to work on campus, but they must report their earnings on their tax returns.

     

     

    9. Know the rules for off-campus employment

    International students may also be able to work off campus, but there are strict rules governing this type of employment.

     For instance, in order to work off campus, students must have permission from US Citizenship and Immigration Services (USCIS), and they might have to pay social security and Medicare taxes.

     

    10. Understand the tax implications of self-employment

    Self-employed international students might also be required to pay regular income tax in addition to self-employment tax.

     

    11. Organize your tax records. Having a clean tax record counts

    The most difficult part of the tax season for many people is gathering all the necessary documentation. This includes last year’s tax return, W-2s, 1099s for this year, receipts, other income documents, and canceled checks.

    It’s important to keep good records of your income, deductions, and other tax-related information. This will make it easier to file your 1040-NR tax return and ensure that you are paying the correct amount of tax.

    Good organization may have financial rewards. Find out what forms you need and print out a tax checklist.

    tax tips 

    12. You may be required to file a federal and state tax return

    International students may need to file a federal income tax return using Form 1040NR if they have US-source income, or Form 1040 if they are considered resident aliens.

    Whether or not international students should file a state tax return depends on the state they live in and the amount of their income.

    Those who reside in states which do not collect income taxes may not be required to file a state tax return. However, even if they are exempt from filing a federal tax return, they may still need to file a state tax return in some states if their income exceeds certain thresholds.

    It’s crucial to confirm the requirements for the state in which you currently reside because they can differ from one state to another. Sprintax can help you determine your state filing requirements.

     

    13. Understand your tax treaty entitlements

    Understand the tax treaty between your home country and the United States.

    Many countries have a tax treaty with the United States that can affect your tax obligations.

    For instance, the treaty may provide a lower tax rate on certain types of income or allow you to claim certain credits or deductions.

     

    14. Understand the difference between tax deductions and tax credits

    You need to understand the distinction between tax credits and tax deductions and figure out which are applicable for nonresidents. Both can reduce what you owe on your tax bill but in different ways.

    Tax credits directly reduce the amount owed on taxes by providing a dollar-for-dollar reduction in your tax bill. Tax credits are more valuable than tax deductions in general because they lower the amount you must pay, whereas a tax deduction reduces your taxable income.

    Changes in the taxation of nonresidents under the Tax Cut and Jobs Act practically waived most of the deductions that they can claim. The following are not available anymore: personal exemption and itemized deductions except the state tax deduction.

    You can only use as a deduction the state and local taxes you pay in the state you worked in.

    You still can claim qualified educational expenses you pay out of your pocket if you are a student at a US educational institution but only to the amount of your grant/scholarship.

    In general, tax credits are not granted to nonresident aliens except in some very rare cases. Nationals of Canada, Mexico, and South Korea, students, and apprentices from India may be eligible to claim either child tax credit for children that are US residents or credit for other dependents if the child is a nonresident alien.

    Sprintax can review your details and circumstances for your applicable allowances, deductions, and credits. The software will finalize the calculations and prepare your tax return.

     

    15. Make sure you have your SSN / ITIN

    You are required to have a government-issued Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) before you can file a US income tax return. Make sure you’ve arranged that.

    To be eligible for any tax treaty benefits, foreign nationals are required by IRS regulations to possess either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN).

     

    US tax deadline

    16. File early to avoid tax deadline stress

    Most taxpayers claim that tax season is stressful. When you have a daunting task ahead of you, it’s best to tackle it immediately rather than procrastinate.

    Worrying over something often causes more anxiety than actually taking action. The same holds true for income taxes.

    Filing taxes before the deadline can provide several advantages. Not only does it allow you to avoid the stress of meeting the deadline, but it also ensures that your return is processed as quickly as possible.

    By filing early, you can also get a head start on any tax planning or adjustments that need to be made. Furthermore, those expecting a refund will receive it much sooner if they file early.

    So, don’t wait until the last minute to file your taxes, get a head start and file early to avoid any unnecessary stress or delays.

     

    17. Or at least file before the deadline to avoid fines and penalties

    The deadline for nonresidents to file their tax return is generally 15 June if they are outside the US, but if you are in the US, self-employed, or have taxes withheld, you may need to file by 15 April. If you need more time to file, you can request an extension, but you will still need to pay any taxes owed by the original deadline.

    Penalties and interest will be assessed if you fail to pay your taxes on time. You can also jeopardize any future visa applications.

     

    18. If you miss the deadline it is still important to file

    Nobody wants to get into trouble with the IRS. Don’t panic if you missed this year’s filing deadline but act quickly.

    Missing the filing deadline or not submitting your return by the tax extension deadline can result in penalties imposed by the IRS. They charge 5% of the taxes due for each month or part of the month that the tax return is not filed.

     

    International student tax refund USA

    19. Plus, you may be due a tax refund!

    International students may be entitled to a tax refund if they had taxes withheld from their income but their tax liability was lower than the amount withheld. To claim a refund, you’ll need to file a tax return and attach any required documentation.

    Claim your international student tax refund with Sprintax

     

    20. Even if you have already left the US you should still file and you can still collect your tax refund

     As a nonresident, it’s important to know that you may be eligible for a tax refund even after you have left the United States. To get your refund you simply need to file a tax return online.

    So why leave your money in the US?

     

    21. Register with Sprintax, here’s why

    If you are unsure about your tax obligations as a nonresident, Sprintax can help you!

     It is a tax preparation software designed specifically for non-US residents who are required to file US taxes.

    The software is designed to make it easier for non-residents to prepare and file their US taxes, and claim their US tax refunds.

    It will provide step-by-step guidance and assistance with calculating and claiming credits and deductions based on your personal situation.

    Sprintax also provides support for filing state and local taxes in addition to federal taxes.

    The software is available in a variety of subscription plans and is intended for use by individuals as well as businesses and organizations.

     

    22. No, if you are a non-resident, you can’t file with TurboTax (Don’t file as a resident if you are a non-resident)

    You cannot file your taxes with TurboTax if you are a nonresident.

     TurboTax doesn’t support IRS Form 1040-NR (U.S. Nonresident Alien Income Tax Return) while Sprintax offers both federal and state tax preparation for international students, scholars, and nonresident foreign professionals.

    What’s more – Sprintax is TurboTax’s partner of choice and the only online solution to offer federal tax e-filing and state tax return preparation for nonresidents!

    File Form 1040-NR online with Sprintax

     

    23. Plus – you can E-file with Sprintax which will save you a lot of tax stress at the deadline

    Say goodbye to paper tax returns! You no longer need to download, print and mail a physical copy of your tax return to the US tax office.

    Sprintax is now approved by the IRS for E-filing, which means you can file your taxes from the comfort of your own home.

    Plus, E-Filing your tax return guarantees faster processing by the IRS compared to mailing a paper tax return.

    Still have questions?

    You can contact Sprintax Live chat to help you with the tax preparation process.

    Remember, you must file your tax documents before 15 July.

    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

    Prepare your US nonresident tax return today!

     

  • How to file a nonresident state tax return

    how to file a nonresident state tax return

    Tax season can be difficult for a lot of nonresidents who move to the US.

    With so many different aspects of taxes in the US, it can be easy to feel a little overwhelmed.

    Filing both state taxes and federal taxes are vitally important to ensure your nonresident state income tax withholding is correct.

    Nonresident state tax returns are one of the lesser-known areas of tax for many people, so in this blog post we’ll outline everything you need to know about them as well as how to file them.

    So, without further ado, let’s dive right in! Continue reading “How to file a nonresident state tax return” »

  • E-Signature on Tax Forms – Can I Sign My Tax Forms Online?

    e-signature on tax forms

    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.

     

    Can I add e-signatures with Sprintax?

    Sprintax can add e-signatures on W-4, W-9, W8-BEN, and Form 8233, but not W-7. You can do this with Sprintax Forms.

    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.

    Check out the handy video below that outlines how to electronically file your return with Sprintax Returns!

     

     

    How Sprintax will help you

    As a nonresident, Sprintax will offer assistance with all you need come tax season.

    At Sprintax, we:

    • Help more than 215,000 nonresidents (including more than 200 nationalities) with their taxes every year
    • Automatically generate completed tax documents including federal, state and FICA tax returns, form 8843, tax return amendments and more
    • Get you your maximum US tax refund. guaranteed – our average federal refund is $1,126
    • 24/7 Live Chat tax support

     

    E-file nonresident tax return with Sprintax

     

     

  • How to file Form 8843 – instructions for nonresident aliens

    IRS form 8843 instructions

    (Last updated: 2 Dec 2022)

    There are 3 things that every US international student and J-1 visa holder needs to know about American tax:

      1. Every US international student and J-1 visa holder has a tax filing requirement
      2. It doesn’t matter if you have earned income. You must still file your documents before the deadline
      3. The IRS takes this stuff seriously! In other words, if you don’t comply with your tax obligations, you may encounter complications when applying for US visas in the future

    Regardless of whether you have earned income during your time in the US, if you are a nonresident in the US, you will still need to file what’s known as a Form 8843 “Statement for Exempt Individuals and Individuals With a Medical Condition”.

    This blog post will focus on exactly what you need to do in order to file this form and remain compliant with the IRS.

    NOTE: If you are considered a resident for tax purposes, you are not required to file IRS form 8843.

    Continue reading “How to file Form 8843 – instructions for nonresident aliens” »

  • Tax and Immigration for J-1/J-2 visa holders – 5 top takeaways from the Nonresident Tax Clinic

    Sprintax J visa nonresident tax webinar

    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.

    If you missed the Nonresident Tax Clinic and would like to check it out, you can watch it back here. Continue reading “Tax and Immigration for J-1/J-2 visa holders – 5 top takeaways from the Nonresident Tax Clinic” »

  • Explainer: What each Sprintax Product will do for you

    What do Sprintax products do

    It has been nearly one year since Sprintax underwent brand updates to ensure we were delivering the very best possible product for our customers.

    Our goal is to assist employers and nonresidents alike in the US with preparing their taxes, ensuring they are 100% tax compliant.

    Each brand offers a simple and easy-to-use product that couples peace of mind with tax compliance – often a rarity in the US!

    So, what is each Sprintax product, and what will it do for you?

    Find out below!

    Continue reading “Explainer: What each Sprintax Product will do for you” »

  • The ultimate tax guide for international students on OPT

    tax guide for students on OPT

    (Last updated: 10 Feb 2023)

    Are you an OPT/CPT program participant?

    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.

    With this in mind, we’ve created this handy tax guide for international students on OPT. Continue reading “The ultimate tax guide for international students on OPT” »

  • What are my tax obligations as a nonresident self-employed worker in the US?

    self-employed and freelancers tax obligations

    (Last updated: 13 June 2022)

    It’s tricky being self-employed – after all, you need to keep a close eye on your income and all of your deductible expenses!

    It’s even more tricky being self-employed in a country where you are unfamiliar with the local tax rules.

    What’s more, when you are considered a nonresident for tax, special rules apply to you when compared with a resident.

    In this blog we will cover the key information that nonresident self-employed individuals in the US need to know about their tax filing obligations. Continue reading “What are my tax obligations as a nonresident self-employed worker in the US?” »

  • I filed an incorrect tax return. Should I file an amended return to fix it and how?

    how to amend my tax return

    (Last updated: 17.05.2022)

    “Don’t worry if you made a mistake on your tax return or forgot to claim a tax credit or deduction. You can fix it by filing an amended return.” – The IRS

    Made an error on your nonresident alien income tax return? Don’t worry, fixing it is not as difficult as you might think!

    Continue reading “I filed an incorrect tax return. Should I file an amended return to fix it and how?” »

  • Are nonresidents subject to tax if they receive a Form 1099-K?

    Form 1099-K tax guide for US international students

    If you have received an IRS 1099-K form, you may be wondering whether the document has any implications for your tax requirements in the US.

    You may receive a 1099-K document (also referred to as a Payment Card and Third Party Network Transactions form) if you received payments through credit or bank card transactions. Continue reading “Are nonresidents subject to tax if they receive a Form 1099-K?” »

  • Your US Tax Residency Status Explained

    US residency for tax purposes

    Last updated: 16 January 2023

    Resident or Nonresident – this is the question!

    Determining your tax residency status is important, as it will determine how much tax you must pay while in the US.

    The most common mistake nonresidents make is filing their taxes as a resident. If a nonresident files as a resident they can claim benefits and receive refunds that they’re not entitled to. Incorrect filing breaks the terms and conditions of a nonresident visa, this can lead to fines and penalties and you may also jeopardize your future visa or green card applications.

    In this article, we will discuss everything you need to know about your residency and how you can determine your residency status.
    Continue reading “Your US Tax Residency Status Explained” »

  • J-1 visa taxes explained – the ultimate US tax return guide for J-1 visa holders

    J1 visa tax return guide 2022

    (Last updated: 10 Feb 2023)

    Tens of thousands of people flock to the US on J-1 student visas each year.

    Every J-1 participant has a tax filing requirement, it’s the law!

    Many J-1 visa holders are confused by the often tricky US tax jargon. However, it’s not as bad as it seems, and knowing even a little about your filing requirements can go a long way!

    With this in mind, we’ve created a blog post that will answer some common queries from J-1 participants in the US! Continue reading “J-1 visa taxes explained – the ultimate US tax return guide for J-1 visa holders” »

  • How to get the forms you will need to file your taxes as a nonresident

    forms you need to file nonresident tax return

    Tax season can be a difficult time for nonresidents in the US. After all, you are filing taxes in an unfamiliar country!

    However, it’s not all bad – Sprintax is here to help!

    And while filing your taxes may seem like a big job, you can make the job easier by breaking it down into smaller tasks.

    Step one is to gather all of the income forms and documents you will need in order to file your return. Continue reading “How to get the forms you will need to file your taxes as a nonresident” »

  • Everything a nonresident needs to know about the US Recovery Rebate Credit

    Recovery Rebate Credit for nonresident aliens

    There is some confusion from nonresidents in the US around the topic of stimulus payments from the pandemic.

    Nonresidents are typically not eligible to receive these payments. However, the IRS sent many checks to nonresidents in error.

    The IRS has recently announced that people who are missing a stimulus payment or got less than the full amount may be eligible to claim a Recovery Rebate Credit on their 2020 or 2021 federal tax return.

    In this guide we will cover everything a nonresident needs to know about the Recovery Rebate Credit. Continue reading “Everything a nonresident needs to know about the US Recovery Rebate Credit” »

  • A Complete Tax Guide for Au Pairs in the U.S.

    au pair paying taxes

    (Last updated: 16 January 2023)

    Each year, thousands of au pairs move to the US to live with host families.

    We’ve put this handy guide together to fill you in on everything you need to know about foreign au pairs and tax in the US.

    Continue reading “A Complete Tax Guide for Au Pairs in the U.S.” »