10 Most Important Tax Facts For Internationals

1) Your employer does not file your income tax returns for you.  You are responsible to see that it gets done.  You will have to sign the tax returns when they are completed.

2) Everyone working in the United States must file a Federal tax return, also known as a United States tax return, if their income exceeds the filing threshold.  Another name for it is a “1040” after the Form number on which it is filed.  This form is filed with the Internal Revenue Service  (IRS) of the Department of Treasury of the United States Government.

3) More than 40 of the 50 states in the United States impose a State Income Tax.  The tax imposed by the state is completely separate from the tax imposed by the US, or Federal, government.  The forms on which you file a State tax return often are calculated very differently than the US tax forms.

4) International Students & Scholars who have lived in the United States within the time frame of their visa (5 or less calendar years for a Student Visa, or 2 or less calendar years for a teacher/researcher visa) will file tax returns with both the US and State as a NONRESIDENT.   The proper forms for a Nonresident typically have the letters NR at the end of the form number (i.e. 540NR in California).

5) If a NONRESIDENT files a RESIDENT income tax form, he/she could be jeopardizing his/her visa. NONRESIDENTS are not allowed to file RESIDENT income tax forms.  DON’T JEOPARDIZE YOUR VISA BY FILING A TAX RETURN AS A RESIDENT UNLESS YOU ARE A RESIDENT.

6) Popular and heavily advertised downloadable tax software such as TurboTax® & H & R Block at Home™ DO NOT support NONRESIDENT income tax forms and do not offer the option to file the proper forms for NONRESIDENTS.  NONRESIDENTS cannot file the proper forms using these softwares.

7) Walk-in Income Tax Preparation services that sprout up in every strip shopping mall during this time of year are not usually trained how to complete nonresident tax returns.  This makes sense because there are so many more RESIDENTS than NON-RESIDENTS.  I personally recommend some of these locations to file simple RESIDENT returns.  But I would never recommend one for NONRESIDENT tax returns because NONRESIDENT tax returns are very different from RESIDENT tax returns, and only a tax professional experienced with the tax laws affecting international students and scholars will know the difference.

8) Many international students and scholars are entitled to the benefits of a United States Tax Treaty with their home country.  While these treaty provisions can save you thousands of dollars in federal taxes, did you know that not all US states honor the provisions of a US Tax Treaty?  That is right – while the income you earn may be fully or partially exempt from US tax because of the Treaty, your state may fully tax that same income.

9) You need to file your 2022 US and State tax returns by April 18, 2023.  Use IRS form 4868 to file a Federal Extension.

10) If you are a NONRESIDENT, and you do go to a walk-in retail income tax preparation service, make sure they know you need to file NONRESIDENT TAX FORMS.  DON’T let them talk you out of it!  Also, if you are a NONRESIDENT, don’t even bother to buy Turbo tax® or  H&R Block at home™.  You will just be wasting your money because you won’t be able to prepare NONRESIDENT forms.

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