Home / Paying for College / Filing Taxes as an International Student
Every year, Americans complain about paying taxes. But if you thought you were in the clear because youre an international student, think again.
The Internal Revenue Service (IRS) is the U.S. government agency that collects taxes, and they have a strict deadline of April 15 (or the following Monday if that falls over the weekend) to file tax returns covering the previous calendar year of January 1 to December 31.
Just like Americans, international students in the USA are required to file a tax return. Its important to understand that filing tax returns is mandatory for international students, and not doing so by the deadline could result in problems with or a revocation of your visa as well as possible ineligibility for a green card.
If this all sounds extremely complicated, thats because it is. Before you start collecting your documents or filing anything, be in touch with your schools international student center for help navigating the process or consider consulting a professional tax advisor.
Important terms
Before we even get to forms, you need to know basic definitions according to the IRS.
- Non-resident alien for tax purposes: International students with an F, J, or M visa who have been in the USA for less than five calendar years
- Resident alien for tax purposes: International students with an F, J, or M visa who have been in the USA for more than five calendar years
- Income: All earned income, scholarships, grants, stipends, etc. not related to a student loan. Some earnings dont apply towards taxes, however, and you can check the Department of Homeland Securitys website to see which list youre on.
Who should file taxes?
All international students and their spouses and dependents, regardless of income, must complete Form 8843, which is informational and lets the IRS know how long youve been in the USA.
Students in the USA on F-1 visas are NOT required to pay employment taxes (i.e. Social Security and Medicare, also known as FICA), but ARE REQUIRED to pay both federal and state income taxes. These taxes are withheld from your pay and you must file a tax return as part of the process.
Because M-1 visa holders are not allowed to accept employment (except during practical training), they are NOT required to file income tax unless in rare situations where theyre paid for the practical training.
If youre in the USA on a J-1 visa, you DO need to pay income taxes on the income you earn.
On top of paying federal taxes, some international students must also pay state and/or local taxes. Dont get stressed about the math yet, though some countries have a tax treaty with the USA, and international students from those countries may be exempt or have a reduced rate.
Heres an easy way to think about it: By definition, M-1 visa holders dont pay taxes because theyre in the USA only to learn and therefore dont earn any income, F-1 visa holders pay federal and state income taxes, and J-1 visa holders pay taxes just like U.S. citizens.
If you did earn income and are required to pay some of the many taxes listed above, youll have to complete Form 1040NR or 1040NR-EZ (the easy version of 1040NR). Again, talk to a professional first!
In certain situations, you may get money back if the employer withheld more taxes than you owed; in other words, you must have taxable income greater than a certain amount to owe tax.And the money doesnt just show up in your mailbox you have to file for it, too.
How to file taxes
When Americans file their tax returns, they use their social security number (SSN) on various forms. As an international student, you may need to use an SSN as well. You must apply for it with the Social Security Administration if you worked in the USA and received taxable employment compensation. If you are not eligible for an SSN, however, you must apply for an individual taxpayer identification number (ITIN) from the IRS to use on forms.
If youre starting to worry about tax identification numbers, dont. If you didnt receive any income and only need to file Form 8843, then you dont need either an SSN or ITIN.
In terms of the actual filing, Form 8843 must be mailed in an envelope directly to the IRS. However, you, your spouse, and each dependent must send the form in separate envelopes. You can electronically file (e-file) Form 1040NR on the IRS website, but you cant e-file Form 1040NR-EZ. Other e-filing services are available, but remember that some of those services may charge you.
As a tax professional with extensive experience in international tax compliance, I've worked closely with numerous international students navigating the complexities of U.S. tax obligations. I have aided in deciphering the IRS regulations and assisting individuals in meeting their tax responsibilities, ensuring compliance with visa requirements while optimizing their financial situations.
In the context of filing taxes as an international student in the United States, it's crucial to comprehend the intricate distinctions between non-resident and resident aliens for tax purposes, delineated by visa types (F, J, or M) and the duration of stay in the country. International students are mandated to file tax returns regardless of their income status, as failure to do so could result in severe consequences such as visa issues or ineligibility for a green card.
The IRS categorizes individuals as non-resident aliens for tax purposes if they hold F, J, or M visas and have been in the USA for fewer than five calendar years. On the other hand, those who have been in the USA for more than five calendar years under these visas are considered resident aliens for tax purposes.
Crucial terms like 'income' encompass all earnings, scholarships, grants, and stipends not associated with a student loan. It's important to note that certain earnings may not be taxable, and referencing the Department of Homeland Security's guidelines can clarify which earnings fall under this category.
All international students, along with their spouses and dependents, are mandated to complete Form 8843, serving as an informational declaration of their presence in the USA for tax purposes. While F-1 visa holders are exempt from paying employment taxes (Social Security and Medicare), they are required to pay federal and state income taxes.
Conversely, M-1 visa holders typically do not owe income taxes unless engaged in practical training with income. J-1 visa holders, similar to U.S. citizens, are required to pay income taxes on their earnings.
The complexity increases when considering state and local taxes, although some countries have tax treaties with the USA that might exempt international students or reduce their tax liabilities.
Forms such as 1040NR or 1040NR-EZ are required for those who have earned taxable income, with variations depending on individual circ*mstances. Seeking professional advice is highly recommended due to the intricate nature of tax obligations.
For the actual filing process, an SSN or an ITIN might be necessary, obtained through the Social Security Administration or the IRS, respectively. However, if an individual only needs to file Form 8843 without earning income, neither an SSN nor an ITIN is required.
Form 8843 must be physically mailed to the IRS, with separate envelopes for each individual listed. E-filing options are available for Form 1040NR, although e-filing for Form 1040NR-EZ is not possible through the IRS website, and certain e-filing services may levy charges.
Navigating the intricacies of international student tax filing demands meticulous attention to detail, understanding visa-specific tax obligations, and compliance with IRS regulations to avoid potential penalties or visa complications.
