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BASIC TAX INFORMATION FOR F1 VISA HOLDERS
INTERNATIONAL STUDENTS TRINITY UNIVERSITY
INTERNATIONAL STUDENTS TRINITY UNIVERSITY
WHY FILE A TAX RETURN
� COMPLY WITH IRS REGULATIONS � REPORT ALL INCOME EARNED AND TAXES WITHHELD � ONLY WAY TO RECEIVE REFUND OF TAXES WITHHELD
HOW ARE RESIDENTS AND NON-RESIDENTS TAXED DIFFERENTLY?
RESIDENTS: � TAXED ON WORLDWIDE INCOME � FILE SAME FORM AS U.S. CITIZENS
NON-RESIDENTS: � TAXED ONLY ON U.S. SOURCE INCOME � ARE NOT REQUIRED TO PAY FICA TAX � USE NON- RESIDENT TAX FORM
FILING REQUIREMENTS � NON-RESIDENT ALIENS - $3800 FOR 2012
� HOWEVER; STUDENTS MUST FILE IF:
1. THEY HAVE A TAXABLE SCHOLARSHIP 2. INCOME PARTIALLY OR TOTALLY EXEMPT BY
TREATY 3. ANY OTHER INCOME TAXABLE BY IRS
FILING NOT REQUIRED IF � NON–RESIDENTS HAVE INCOME ONLY FROM FOREIGN SOURCES
� INTEREST IS FROM A BANK OR CREDIT UNION
� SCHOLARSHIP FUNDS ARE SPENT ONLY ON QUALIFED EXPENSES
� RECEIVED ANY OTHER MONEY WHICH IS NONTAXABLE BY IRS.
DETERMINING TAX RESIDENCY STATUS
SUBSTANTIAL PRESENCE TEST � IRS FORMULA TO DETERMINE WHEN NON-RESIDENT
ALIENS FOR IMMIGRATION PURPOSES HAVE BEEN IN THE USA LONG ENOUGH TO BE CONSIDERED RESIDENTS FOR TAX PURPOSES
� HOWEVER, EXEMPT INDIVIDUALS ARE AUTOMATICALLY NON–RESIDENTS ALIENS FOR TAX PURPOSES
WHO ARE EXEMPT INDIVIDUALS
� F1 VISA HOLDERS ARE EXEMPT FROM SUBSTANTIAL PRESENCE TEST FOR ANY PART OF 5 OR FEWER CALENDAR YEARS
� BUT STILL MAY BE REQUIRED TO FILE A U. S. TAX RETURN IF MEET FILING REQUIREMENT
TAXABLE INCOME FOR EXEMPT INDIVIDUALS
GENERALLY REPORT ALL INC0ME YOU RECEIVE IN U.S.
� EMPLOYMENT ON AND OFF CAMPUS � SCHOLARSHIP (MAYBE) � PRACTICAL OR ACADEMIC TRAINING � DIVIDEND INCOME � ETC. KEY- NON-RESIDENTS PAY INCOME TAX ONLY
ON U.S. SOURCE INCOME
ARE SCHOLARSHIP FUNDS TAXABLE?
� NON-RESIDENTS ARE NOT TAXED ON FOREIGN SOURCE SCHOLARSHIPS
� NON-RESIDENT ALIENS ARE TAXED ON U.S. BASED SCHOLARSHIPS NOT USED FOR TUITION, REQUIRED FEES, BOOKS, SUPPLIES, AND EQUIPMENT � KEY POINT- MANY TAX TREATIES ALLOW AN EXEMPTION FOR SCHOLARSHIPS
NON-RESIDENT TAX FORMS � FORM 8843 - STATEMENT FOR EXEMPT INDIVIDUALS FILE EVEN IF NON-RESIDENT HAS NO U.S. SOURCE INCOME - FILE BY JUNE 15 ONE FORM FOR EACH FAMILY MEMBER
� PURPOSE- AN INFORMATIONAL FORM STATING EXEMPTION FROM COUNTING DAYS FOR SUBSTANTIAL PRESENCE TEST IF FILING BOTH FORM 8843 AND A TAX RETURN- MAIL TOGETHER BY APRIL 15
NON-RESIDENT TAX FORMS
FORM 1040NR AND FORM 1040NR-EZ (INCLUDE FORM 8833 WITH TAX RETURN IF TAKE A TREATY BASED POSITION)
FILE BY APRIL 15
NO STATE TAX ISSUES IN TEXAS
IMPORTANT- DO NOT FILE A FORM 1040EZ
TAX TREATIES IMPACT OF TAX TREATIES DISCUSSED IN IRS PUB 901
EXAMPLES:
� IN MANY COUNTRIES, SCHOLARSHIPS ARE NOT TAXABLE. (CHINA, KOREA, SPAIN)
� ALSO, SOME INCOME IS NOT TAXABLE (CHINA - FIRST $5000; FRANCE - FIRST $8000)
SUPPORTING DOCUMENTS � W-2 FORM FROM EMPLOYER – REPORTS WAGES EARNED – MAILED BY JAN 31
� FORM 1042s - FOREIGN PERSON WITH INCOME SUBJECT TO WITHHOLDING – MAILED BY MAR 15
1. USED TO REPORT SCHOLARSHIP INCOME NOT EXCLUDED FROM GROSS INCOME AS A “ QUALIFIED SCHOLARSHIP” 2. FILE FORM W-8BEN WITH UNIVERSITY OFFICE IF SCHOLARSHIP IS EXEMPT FROM TAXATION 3. CAN BE USED TO REPORT WAGES EXEMPT UNDER A TAX TREATY
FAMILY ISSUES � - DEDUCTIONS FOR DEPENDENTS GENERALLY NOT ALLOWED
� - EXCEPTIONS FOR NON-RESIDENTS FROM CANADA, INDIA, SOUTH KOREA, AND MEXICO
� - MARRIED NON-RESIDENT CANNOT FILE JOINTLY WITH NON-RESIDENT SPOUSE
� - MOST TAX CREDITS DO NOT APPLY
� - STANDARD DEDUCTION NOT ALLOWED EXCEPT FOR STUDENT FROM INDIA
SPOUSE AND DEPENDENTS
� - FORM 8843
� - U.S. SOURCE INCOME MUST BE REPORTED
FILING STATUS AND DEPENDENTS
MOST NON-RESIDENT ALIENS CANNOT CLAIM THEIR DEPENDENTS – EVEN IF THE DEPENDENT IS A U.S. CITIZEN
SOCIAL SECURITY TAX
� NON-RESIDENTS WITH AN F1 VISA ARE EXEMPT FROM SOCIAL SECURITY AND MEDICARE TAXES
� IF RESIDENT FOR TAX PURPOSES, USUALLY SUBJECT TO FICA TAXES
FICA REFUNDS
WHEN WITHHELD IN ERROR
� ASK EMPLOYER TO REFUND � IF NOT REFUNDED, USE IRS FORM 843 TO REQUEST A REFUND
DO I NEED A SSN OR ITIN � IF FILING ONLY FORM 8843 - NO NUMBER REQUIRED
� ANY 1040 TAX FORM – NEED A SOCIAL SECURITY NUMBER OR INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER(ITIN)
� FILE FORM W-7 TO REQUEST AN ITIN
� DEPENDENTS MUST ALSO HAVE SSN OR ITIN IF TAX CODE ALLOWS AN EXEMPTION
ADDITIONAL TAX RESOURCES
� IRS PUBLICATIONS
� PUB 519 TAX GUIDE FOR ALIENS
� PUB 901 TAX TREATIES
� TAX PREPARATION SPECIALISTS
ADDITIONAL QUESTIONS PLEASE CONTACT:
LARRY BARKER ENROLLED AGENT & MASTER TAX ADVISOR
[email protected] 210-653-6507