If you see American adults freaking out in the months leading up to April, and you have no idea what’s going on, it’s probably tax season. If you’re a student from a foreign country (which we assume you are since you’re reading this blog) then you probably have a lot of questions. Do I have to file for taxes as a foreigner? What if I am not making any money? Will the IRS come after me? Here’s a quick guide to American taxes and how to navigate the confusing sea of information that’s out there. (We do not claim to be tax experts and you should consult a tax expert if you have questions that go beyond what we cover here).
Form 8843: Regardless of your income, as a non-resident alien you must complete this form. This is basically a way of telling the IRS that you’re a student in the US and even though you currently a lot of time here, you are not considered a resident for tax purposes because of the type of visa you are on. This is great, because even though you may have to pay federal and state income taxes, you are exempt from Social Security and Medicare taxes. Make sure you complete this form every year.
If your employer has been withholding Social Security and Medicare taxes and you qualify for the exemption, then you should ask your employer for a refund, as they are required to give you one. If they refuse, or say it’s too late, you will have to file Form 843 and Form 8316. It is helpful to tell employers that you are exempt from these taxes when you start a new job, because they will automatically take them out otherwise.
What tax form do I fill out? As an international students, your income will probably come from traditional part-time wages. If you don’t have any strange deductions or interests for investments that you’re earning, then Form 1040NR-EZ is probably what you need. International students must file for taxes if their earnings are over the personal exemption. For 2017, the exemption is $4,050. So, if you made over $4,050 in the year 2017 (remember you’re filing for taxes for the year before) then you must file for taxes. Based on how many taxes were withheld, you might get a refund or you might have to include a check to the IRS with the money you owe. Good news is – Form 1040NR can now be filed online. Navigating the world of online tax return services can be a nightmare and it seems like we get bombarded with advertisements for these all the time (hello, TurboTax!). Unfortunately, services for non-resident alien tax returns are very limited. OnLine Taxes is what I’ve been using for the past few years. They will walk you through the entire process and it’s generally free!
Note: Whenever you filled out your form W4 to start a new job (your employer should ask you to do this before your first pay period), as an international student you MUST have only ONE allowance. No more and no less. (I might have screwed that up when I first started my job…good thing you can change it at any time!) This will seem very nice when you don’t owe money to the IRS!
What’s up with all these W2’s?: biggest thing that you will need to fill out form 1040NR-EZ is a W2 from every job you have had in the last tax year; you should receive those by mail, but if not you should contact your employer. They will have a breakdown of your total earnings, as well as how much taxes were taken out. You will need to mail these in with the rest of your tax documents, so make sure you have printed copies on hand.
Tax Treaties & Your Country: Depending on what country you are from, your country may have a treaty with the United States to allow a greater tax exemption than $4,050. For example, the Canadian tax treaty with the US allows for full tax exemption at earnings up to $10,000 annually. For more information about current US income tax treaties, check out this handy guide.
If you receive a 1099-MISC from your employer. If you performed personal services as an independent contractor (with USCIS permission, of course) then you will probably have to file Form 1040NR (instead of the EZ version) and include a Schedule C-EZ. This income will be reported as business income (on line 13 of the 1040NR). You are exempt from Self-Employment tax if you’re a non-resident alien under F-1 status.
You cannot include your tuition as a deduction if you’re an international student. I’ve been receiving these forms 1098-T from school every year telling me how much money I spent on tuition. It would be nice to get a tax break for this expense but as an international student you cannot include this in your deductions. However, you’re probably not making enough money that it matters at this point.
The deadline is April 17th. So make sure you file and pay for your taxes before the due date! As an international student, it’s never a bad thing to stay in good terms with Uncle Sam.