All posts tagged tax filing

  • 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.

    Here’s what you should know about the US Recovery Rebate Credit as a nonresident.

     

    What is the US Recovery Rebate Credit?

    The Recovery Rebate Credit was a payment that was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that came into existence in the early days of the pandemic, in 2020.

    This initial part of this stimulus payment was of up to $1,200 for any of the qualifying adults and up to $500 per qualifying dependent.

    A lot of these payments were sent out in mid-2020.

     

    How much is the credit?

    For the majority of people, the base amount received from the credit was $1,400.

    For married couples who filed a joint tax return, the total was $2,800.

    The amount received is generally based on factors such as

    • Filing status
    • Amount of children who can qualify
    • Adjusted amount of any impact payments already received
    • Gross income

     

    Can a nonresident claim the Recovery Rebate Credit?

    At the time of the payments, there was confusion around the qualifying factors as many nonresidents and residents alike received it.

    However, strictly speaking, nonresidents (including nonresident international students) do not qualify for any of the credit, as you:

    • Must be a US citizen or U.S. resident alien in 2020
    • Cannot have been a dependent of another taxpayer in 2020
    • Must have a Social Security number that is valid for employment before the 2020 tax return due date

     

    I filed as a resident and Recovery Rebate Credit in error, what should I do?

    The first point to remember is that you shouldn’t worry, you are not alone in receiving this in error!

    The good news is that all you need to do is file an amended tax return for the relevant year you filed as a resident and thus pay any tax liability that you owe to the IRS.

    Thousands of amended returns are sent to the IRS each year, this is completely normal and happens to many nonresidents. An amended nonresident tax form is formally known as 1040X.

    Completing a 1040X online is quite easy, and you can do it today with Sprintax!

     

    I filed correctly but received the payment. What should I do?

    This is another common scenario we have seen over the past year.

    Most people find they have either cashed the check or have not cashed it, so will be left with two options:

    1. You received the check but have not yet cashed it:

    1. You’ll need to write “Void” on the back of the check.
    2. Mail the check to a valid IRS branch location closest to you.
    3. Include in it a note outlining why you are returning the check.

    2. You received the payment as a check and cashed it/ you received the payment through direct deposit:

    1. This will require you to send a personal check, or money order, etc., to your relevant IRS branch location.
    2. On the check/money order, you’ll have to write “made payable to ‘U.S. Treasury’” and also write ‘2020EIP’, and your taxpayer ID (in this case your social security number, or individual taxpayer identification number/ITIN).
    3. Again, give an explanation of the reason for returning the payment.

     

    How Sprintax can help you

    Sprintax is the go-to service for nonresident and international student tax preparation in the US.

    If you accidentally claimed the recovery rebate credit, we can help you prepare your 1040X to ensure you are on the right side of the tax authorities.

    If you are unsure of your tax obligations, our tax team is more than happy to discuss your case with you.

    We have a 24/7 Live Chat service that will provide you with key assistance when you need it the most.

    We’ll complete a full tax review on our user-friendly system, ensuring you are ready to file your optimized tax return.

     

    Prepare your 1040X form with Sprintax Returns.

    Start here

     

     

  • The dangers of not filing a tax return

    Not filing a tax reurn

    If you have worked or studied in the USA, did you know that you are obliged to file taxes?

    Many nonresidents are unaware of this fact due to a combination of factors, such as busy lifestyle or they have left the country.

    However, whatever the case may be, not filing your taxes has very serious consequences.

    If you are a nonresident and still live in the US, continuing to avoid your responsibility can result in automatic wage seizure by the courts, asset seizures like your car and may even lead to arrest and jail time for tax evasion.

    What happens if I don’t file?

    If you do not pay the taxes you owe by the tax deadline (15 April every year, except 2020 and 2021 which were 17 May and 15 July respectively) you could be hit with a variety of punishments.

    Here are a few different dangers of not filing your tax return:

    You could miss out on your tax refund!

    If you are entitled to a tax refund, you won’t be punished for filing late by the IRS.

    If you wait longer than three years from the date your refund is published, however, you will lose out on your chance to claim the refund as it will automatically be handed over to the US government.

    You could be hit with fines and penalties

    If you have unpaid taxes, you will owe the IRS interest in addition to any penalties.

    You should do your best to file your tax return before the deadline to avoid facing penalties and fines!

    The penalty for filing late is normally 5% of the unpaid taxes for each month or part month that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25% of your unpaid taxes.

    If you file your tax return more than 60 days after the due date or extended due date, the minimum penalty is strong – $135 or 100% of the unpaid tax, whichever is less.

    If you do not pay your taxes by the tax deadline, you will normally face a failure-to-pay penalty of 0.5% of your unpaid taxes.

    Residency status for tax purposes

    Can I file if I have left the US?

    Yes!

    You can file your US tax return with Sprintax from anywhere in the world!

    Sprintax is the only online Federal and State self-prep tax software for nonresidents in the US!

    Our system will assist you in preparing fully compliant Federal and State tax returns and secure your maximum legal tax refund.

    The average federal refund in the US is $1,126!

    With Sprintax you can:

    • Save time and stress!
    • Determine your residency status
    • Prepare a fully compliant US tax return
    • E-file your Federal tax return
    • Maximize your State tax refund
    • Avail of our 24/7 Vita Qualified Live Chat facility

    Complete your nonresident tax return today!

  • H2B workers and taxes – all you need to know

    H2B visa temporary worker-tax guide

    What is the H-2B visa?

    The H2B program allows employers in the US, who meet regulatory requirements, to bring nonresidents to the US to fill temporary (non-agricultural) jobs – for example, hotel staff, janitors, amusement park workers, landscapers, etc.

    US Government announces increase in H2B visa cap for 2021

    The US government has announced that the H2B visa cap has been extended by 22,000 visas to a total of 88,000 per year. Continue reading “H2B workers and taxes – all you need to know” »

  • Your frequently asked nonresident tax questions answered

    nonresident alien FAQs

    Here are the answers to some of the most frequently asked questions about U.S. taxes. Continue reading “Your frequently asked nonresident tax questions answered” »

  • 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?” »

  • Filing taxes on H1B visa – the Ultimate guide

    H1B visa tax filing

    Last updated on 10.01.22

    About H1B visa

    The H1B visa enables skilled workers with specialized expertise to live in the US for three years (later it can be extended for another three years), and work for a sponsoring employer.

    In order to apply, you need specialized knowledge and a bachelor’s degree or equivalent work experience in areas such as medicine, science, mathematics, information technology, architecture, finance, and accounting.
    Continue reading “Filing taxes on H1B visa – the Ultimate guide” »

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

    Tax return mistakes nonresidents

    (Updated for 2021)

    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” »

  • I filed as a resident in 2018. I have since left the US. I received the CARES payment. What should I do?

    Nonresident received IRS stimulus check

    In response to the COVID-19 outbreak, the US government rolled out the emergency CARES (Coronavirus Aid, Relief and Economic Security) Act.

    Essentially, it is a stimulus package that provides workers (earning less than $75,000 per year) with a one-time payment of $1,200.

    The stimulus payment can only be claimed by US citizens, permanent residents, and residents for tax purposes (individuals who can pass the Substantial Presence Test) who have a valid Social Security Number (SSN), who have filed their 2018 tax return (in 2019), or their 2019 return (in 2020) and who will be considered a qualifying resident alien for the 2020 tax year.

    For more details on how US residency for tax purposes is determined, check out this blog post.
    Continue reading “I filed as a resident in 2018. I have since left the US. I received the CARES payment. What should I do?” »

  • Is Sprintax Returns Safe?

    (Last updated: 29 Apr 2021)

    How to securely file your tax return and retrieve your refund 

    Continue reading “Is Sprintax Returns Safe?” »

  • Her J-1 katılımcısının ABD vergileri hakkında bilmesi gereken 5 şey

    student j1 tax refund US
    • Başkan Trump’ın ‘Vergi Kesintileri ve İş Kanunu’ J-1 vize sahipleri için ne anlama gelmekte.
    • J-1 yükümlülük ve haklarını anlamak.
    • Sprintax – J-1 vergi iadesine başvuru yapmak için en kolay yol.

    Continue reading “Her J-1 katılımcısının ABD vergileri hakkında bilmesi gereken 5 şey” »

  • How to maintain a valid F-1 visa status

    International student on F-1 visa

    Can I leave and return to the US on an F-1 visa?

    Am I entitled to work during the semester?

    How long can I stay in the country after my program is finished?

    To find out more about filing tax returns as an F-1 visa student, check out this guide.

    Continue reading “How to maintain a valid F-1 visa status” »

  • Filing Your U.S. Tax Return: 5 Things You Should Know

    filing your taxes

    As an international student in the U.S., you are obliged to file a federal and state tax return for each year you are present in the U.S. Even if you have earned no U.S. sourced income, you still need to file a form 8843. All nonresident aliens in the U.S. under F-1, F-2, J-1, or J-2 and other non-immigrant exchange program status must file form 8843.
    Continue reading “Filing Your U.S. Tax Return: 5 Things You Should Know” »