Presentation on theme: " This workshop is for students on F-1 who have been in the U.S. for 5 years or less. The information provided in this tax workshop is intended only."— Presentation transcript:
This workshop is for students on F-1 who have been in the U.S. for 5 years or less. The information provided in this tax workshop is intended only to give you a general sense of taxpaying requirements and may not be relied upon in preparing your individual tax return. Specific instructions are provided by Internal Revenue Service (IRS) or state and local agencies.
April 15 th June 15 th if filing a tax return from outside the US. Individuals who need to file only the Form 8843 because they had no income are also given until June 15 to submit their form.
1. Personal Property Tax (supports local roads and schools and is primarily a tax on ownership of a car). Non-residents are not exempt from this tax. 2. Social Security and Medicare taxes (together called FICA).these taxes support US retirees and the disabled. Nonresidents in the F categories are exempt from these taxes during the time they are “non-resident aliens” for tax purposes if they are in valid immigration status.
3. City/Local Income Tax is generally required in larger metropolitan areas, i.e. New York City. 4. State Income Tax. Individuals living in certain states are required to file. NYS is one. Some states allow tax treaty exemptions similar to those available at the federal level; others do not. It is the responsibility of the individual taxpayer to follow the rules of the state that they live in. 5. Federal Income Tax.
In the US, federal income taxes are prepaid by our employer based on the estimate of liability provided by the employee on the Form W-4, usually filled out at time of hire. Since the amount taken out is only an estimate, employees are given a yearly opportunity to reconcile the amount taken out with how much was owed. This is a tax return.
In some cases, filing the tax return results in a refund from the IRS because the withholding was higher than necessary. However, sometimes a taxpayer does not have enough withheld and must pay the IRS.
Alien: generally, any person who is not a U.S. citizen Student: person temporarily in the U.S. on an F, J, Q or M visa Compensation/Earnings: wages, salaries, tips Income: wages, salaries, tips, interest, dividends, some scholarship/fellowship grants Withholding: U.S. income tax automatically taken from your paycheck IRS: Internal Revenue Service Income Tax Return: statement filed (submitted) by individual taxpayer to the IRS
All individuals in the US who have income must file a US tax return. – Tax residents file a 1040, 1040A or 1040-EZ. – Nonresidents for tax purposes must complete either a 1040NR-EZ or a 1040-NR. A tax return must be filed even if no taxes are withheld from the income because of a tax treaty exemption between the US and the country of tax residence for the international visitor.
In addition to a tax return, all individuals in the “F” immigration status who are “exempt individuals” (including spouse and young children) are required to file a Form 8843 – Statement for Exempt Individuals. – Filing this form does NOT mean the person is exempt from taxes, but rather that he or she is exempt form counting days of presence in the US to determine if he or she is to be taxed as a resident or a non resident. – This form asks for certain information about immigration status and tax treaty claims. Therefore, if a nonresident alien has no income in the US but is still within the “exempt individual” period, he or she must file the Form 8843.
Warning – Two primary US government agencies us the terms “Non-resident” and “Resident Alien,” but define them differently. This can lead to confusion. 1. US Immigration (USCIS) defines a nonresident alien as someone in the US who is not a US citizen or US permanent resident, who has a residence abroad he or she does not intend to abandon. 2. IRS – Residents are all US citizens, lawful permanent residents and non resident aliens for immigration purposes who have met the Substantial Presence Test. Nonresident aliens are all others, regardless of immigration status
Substantial Presence Test – one must be present in the US for a total of 183 days, counted over a period of three years. Those in “F” do not count days during the time they are “exempt individuals.” “F” students and their dependents are “exempt individuals” for a period of five years throughout their lifetime (going back as far as January 1, 1985).
Remember “exempt individuals” means exempt from counting days of physical presence toward the substantial presence test, not exempt from paying taxes. During the time individuals are exempt, they cannot pass the 183 day SPT and will remain nonresidents for tax purposes even though they are present in the US for more than 183 days.
You do not have to pay taxes, but you must send a form 8843 to the IRS.
You could have one or more from different employers. The form was prepared by your employer and mailed to you. You do not write anything on this form. You use this form as a reference when you prepare your income tax return.
16-6000000 6000.00540.00 State University 345 University St Collegetown, NY 00000 010-00-0101 Joy Kim 123 University Lane CollegeTown, NY 00000 NY 16-6000000 6000.00 240.00
Form 1042 – S Normally used to report income covered by a tax treaty
New for 2006 You do not need to file a form 1040-NR if: 1. You have only taxable U.S. Source Wages that were less than $3,300; and 2. You have no other need to file to claim a refund of over-withheld taxes.
Many countries have Tax Treaties with the U.S that allow their residents to earn some money while temporarily in the U.S. without being subject to income tax on those earnings. Tax treaties may effect who can be claimed (dependents and spouses). Examples are South Korea, India and Canada See IRS Publication 901 for details.
New for 2006: Internal Revenue Service Austin, Texas 73301-0215, U.S.A
VITA on Campus beginning in March Internal Revenue Service http://www.irs.govhttp://www.irs.gov IRS International Customer Service: (215) 516-2000 IRS Toll Free Number – 1-800-829-1040 US Tax Guide for Aliens http://www.irs.gov/pub/irs-pfd/p519.pdf http://www.irs.gov/pub/irs-pfd/p519.pdf US Tax Treaties http://www.irs.gov/pub/irs- pfd/p901.pfdhttp://www.irs.gov/pub/irs- pfd/p901.pfd