basic tax information for f1 visa holders

BASIC TAX INFORMATION FORF1 VISA HOLDERS

INTERNATIONAL STUDENTSTRINITY UNIVERSITY

INTERNATIONAL STUDENTSTRINITY 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 SCHOLARSHIP2. INCOME PARTIALLY OR TOTALLY EXEMPT BY TREATY3. 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 INDIVIDUALSGENERALLY 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 TREATIESIMPACT 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 DOCUMENTSW-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 TAXATION3.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 TAXNON-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 QUESTIONSPLEASE CONTACT:

LARRY BARKERENROLLED AGENT & MASTER TAX

ADVISORLARRY.BARKER@TAX.HRBLOCK.COM

210-653-6507