All posts tagged Non-resident tax return

  • Keep your tax records when Tax season is over. Here’s why

    Keeping tax records after tax season

    (Last updated: 17 Apr 2024)

    Here are the tax records you need to keep and how long you should keep them

    When tax season ends it can feel like a big weight has been lifted off your shoulders – an opportunity to exhale and relax (until it all starts again next year that is!) But before you expel all tax topics completely from your mind, there is one final task you must complete.
    Continue reading “Keep your tax records when Tax season is over. Here’s why” »

  • What income is taxable for nonresident aliens in the US?

    Taxable income of nonresident aliens

    Are you a nonresident living in the US? We know it can be confusing to understand the tax system in your home country, let alone in a different one, so we are here to help explain what income is taxable for nonresidents in the US.

    As a foreign national you can be subject to one of two different systems of taxation in the US, depending on whether you are classified as a nonresident or resident alien in the US.

    If you are a nonresident alien, you are subject to US income tax only on your US source income and just like residents, you must report your income on US income tax returns.

    In this guide, we are going to take a closer look at the various different types of income which are taxable in the US and outline our tips on managing your tax requirements.
    Continue reading “What income is taxable for nonresident aliens in the US?” »

  • 24 tax tips for nonresidents to maximize their US tax refund in 2024

    U.S. nonresident tax-refund tips for 2024

    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 24 tax tips that can answer your questions and help you trim your tax bill and maximize your US tax refund in 2024.

     

    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 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. 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. 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. File an amended tax return if you find out you made a mistake

    Made a mistake on your tax return? You can fix it by filing an amended tax return.

    A tax return can be considered ‘incorrect’ or ‘incomplete’ for a variety of different reasons. Simple things like forgetting to sign a form, to big issues like misreporting income, or incorrectly calculating a deduction can all affect the validity of a tax return. Learn more here.

     

    22. 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.

     

    23. 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

     

    24. 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!

     

  • My state residency differs from my federal residency. How is this possible?

    federal residency different from state residency

    We’re here to clear your residency confusion!

    All Foreign Nationals living, working or studying in the US are responsible for their personal compliance with the United States Federal and State tax laws and regulations.

    But what are these laws and regulations?

    Well, for starters, every foreign national living in the US is required to submit an annual income tax return. But the type of tax return you will need to file depends largely on where you live and work.
    Continue reading “My state residency differs from my federal residency. How is this possible?” »

  • The top 5 mistakes nonresidents make on their tax returns and how to avoid them

    Tax return mistakes nonresidents

    US tax is tricky and it is easy to make a mistake when filing your tax return.

    Such mistakes can be frustrating and lead to delays in both processing your tax return and retrieving your tax refund.

    In this guide, we’ll highlight the five most common mistakes made by nonresidents while filing their tax return and provide top tips on how to avoid them! Continue reading “The top 5 mistakes nonresidents make on their tax returns and how to avoid them” »

  • Топ 5 ошибок, которые нерезиденты совершают в своих налоговых декларациях и как их избежать

    Топ-5 Ошибки налоговой декларации США

    Налог в США сложен, и при подаче налоговой декларации легко ошибиться.

    Такие ошибки могут досадными и привести к задержкам как в обработке вашей налоговой декларации, так и в получении возврата налогов.

    В этом руководстве мы выделим пять наиболее распространенных ошибок, допускаемых нерезидентами при подаче налоговой декларации, и дадим советы о том, как их избежать! Continue reading “Топ 5 ошибок, которые нерезиденты совершают в своих налоговых декларациях и как их избежать” »

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

    self-employed and freelancers tax obligations

    (Last updated: 12 Mar 2024)

    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?” »

  • Everything international students wanted to know about US tax (but were afraid to ask!)

    You might be surprised to learn that, at present, there are around one million international students studying in the United States. What won’t surprise you however, is that each of these one million students have tax obligations in the United States.

    What are these obligations? This is where things get a bit tricky!

    If you’re an international student in the US you might not be too familiar with the local tax system. And it’s highly likely that you’ll have some questions about your tax obligations and what you’re entitled to. That’s why we’ve created this handy guide to US tax for international students and other nonresident aliens.
    Continue reading “Everything international students wanted to know about US tax (but were afraid to ask!)” »

  • 13 US tax questions every nonresident student asks us!

    Are you a nonresident student in America? Do you find US tax to be confusing?

    Don’t worry, you’re not alone! Even for the most financially savvy US citizen, American tax can be pretty tricky.

    That’s why we’ve prepared a list of common questions nonresidents ask us and answer them here in this handy blog!
    Continue reading “13 US tax questions every nonresident student asks us!” »

  • Utilizar TurboTax para reclamar tu reembolso de impuestos J1 puede ser ilegal

    Turbotax reembolso de impuestos

    (Última actualización: 14 Mar 2024)

    Es difícil imaginar algo peor que el IRS (Internal Revenue Service, Servicio de Ingresos Internos) después de la experiencia J1 de tu vida.

    Sin embargo, esto es exactamente lo que puede suceder si presentas una declaración de impuestos incorrecta de Estados Unidos.
    Continue reading “Utilizar TurboTax para reclamar tu reembolso de impuestos J1 puede ser ilegal” »

  • Which tax form should I use: Form 1040 or 1040NR?

    Form 1040NR vs 1040 vs 1040NR-ez

    (Updated for 2024)

     

    Coming to the US from a foreign country presents both thrills and challenges to every nonresident. One of the more common difficulties nonresidents face is filing their tax return.

    In this blog post, we’ll be discussing Forms 1040, 1040NR, 1040NR-EZ, and how they apply to each person’s situation (Important: Since 2020, form 1040-NR-EZ is no longer used.)

    Form 1040 (NR) figures out the total taxable income of the taxpayer and determines how much of a refund the person may be due.

    So, without further ado, let’s examine how to find out which form applies to you! Continue reading “Which tax form should I use: Form 1040 or 1040NR?” »

  • I have received a 1095 form. Should I include this on my tax return?

    reporting forms 1095 and 1098 on NRA tax-return

    (Last updated: 6 Mar 2024)

    Which details from your 1095 and 1098 forms should you include on your tax return?

    In March 2010, when President Obama signed the Affordable Care Act (ACA) into law, three new forms were introduced into the US tax system – 1095 A, B, and C.

    The primary focus of these forms is to account for the healthcare coverage you purchased during the tax year.

    However, if you are a nonresident in the US, you may be wondering why you received a 1095 form (especially when you consider that purchasing healthcare coverage through the Health Insurance Marketplace is not mandatory for nonresidents) and whether or not you can claim any benefits on your tax return.

    The answer to this question very much depends on your personal circumstances and the type of form you received.

    In this guide, we will cover everything you need to know about 1095 forms and how to file a compliant tax return.

     

    Continue reading “I have received a 1095 form. Should I include this on my tax return?” »

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

    J1 visa tax return guide 2022

    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” »

  • Tax guide for summer camp counselors on J-1 visa

    J1 tax return summer camp counselors in 2024

    The camp counselor program allows you to share your culture and ideas while working in a camp setting in the US.

    To take part in the camp counselor program, you need a J-1 cultural exchange visa. This visa allows non-immigrant aliens to temporarily live in the US to participate in the summer camp.

    Generally, J-1 camp counselors are considered nonresidents for tax purposes. You must fill out important tax documents when you arrive at the camp, and your camp director can help you with this. Continue reading “Tax guide for summer camp counselors on J-1 visa” »

  • Nonresident alien tax filing explained

    NRA tax guide

    Last updated: 26 Jan 2024

    Whether you are dreaming of a trip to the US, or you are about to embark on one, the prospect of jetting off to The Land of Opportunity is bound to be exciting.

    While you get to grips with the culture in the US, one area that often confuses nonresidents is tax.

    That’s why Sprintax is here!

    We specialize in making tax as straightforward as possible to newcomers in the US.

    So, without further ado, here’s our ultimate guide to filing taxes as a nonresident in the US. Continue reading “Nonresident alien tax filing explained” »