“In this world, nothing can be said to be certain, except death and taxes” – Benjamin Franklin, 1789
Taxes are an unavoidable fact of life. Even if you are a non-U.S. citizen, you may be required to pay U.S. taxes if you earned income in the United States. While we can’t give you specific advice and you should not rely on this blog as a substitute for professional legal or tax advice, we’ve collected some of the most frequently asked questions from international students studying in the U.S—plus, we’ve negotiated a deal with Sprintax so that our borrowers can get free assistance with their federal tax return!
The Top 10 Tax Questions Asked by International Students—and the Answers!
Do I Have to Pay U.S. Income Taxes as an International Student?
That depends. If you’ve earned income during the year, you will be responsible for paying tax on that income to the U.S. Internal Revenue Service (IRS). Taxable income comes in many forms and includes but is not limited to:
- Money you earned from an on-campus or off-campus job or internship;
- Money you earned from a taxable assistantship or research fellowship (for more information, see IRS publication Tax Benefits for Education);
- Tips (from, for example, a job as a waiter or bartender);
- Consulting, rental, or other types of income; and
- Awards (such as case competition winnings) and prizes. If you win the lottery, you’ll owe tax on your winnings!
If you earned money from any of the sources above, you need to complete and file a U.S. federal tax return.
In most states, if you have any of the income listed above, you will also be required to file a state tax return with the state in which you are residing. Note, however, that some states do not have income taxes. If you are in one of those states, you are lucky and don’t need to file a state tax return or pay state income taxes!
However, just because you earned income and are required to file a tax return does not mean you will have to pay any taxes above and beyond what you already may have paid. You may have earned so little that, once deductions are factored in, you are not required to pay taxes.
Alternatively, if you earned income from a job or internship, your employer has most likely already deducted taxes from your wages. These taxes will be shown on a W-2 Form (also known as a Wage and Tax Statement), which should be provided by your employer in February. If the amount deducted is more than the amount you owe, you’ll actually get a refund! If the amount deducted is less than the amount you owe, you will need to send a check with the additional amount owed.
Finally, your country may have a tax treaty with the United States that allows its residents to pay reduced—or no—U.S. federal taxes.
Remember, filing a tax return is mandatory for international students, as a condition of your student visa.
Are There Other Forms I Need to File with the IRS?
Even if you did not earn any money in the US, you still have to file a Form 8843 (“Statement for Exempt Individuals and Individuals With a Medical Condition”) with the Internal Revenue Service (IRS). This form is NOT an income tax return. It is merely an informational statement required by the US government to prove that you should be considered a nonresident alien for the purposes of tax filing.
When Is the Deadline for Filing My Tax Return?
Federal income tax returns must be postmarked by midnight, April 15th of each year. (“Postmarked” means that the U.S. Post Office has received it and stamped it.) Other forms such as state tax returns and Form 8843 have different deadlines.
What Residency Status Should I Select on My Tax Return?
If you are in the U.S. on a F, J, M or Q visa, you are generally considered a “non-resident alien” for tax purposes. If you are a non-resident, the U.S. will not tax your income from non-American sources. For example, if you earned interest in a bank account in your home country, that income is not subject to U.S. taxation.
If you are in the U.S. on a Green Card, you are considered a “resident alien.”
For more details, see IRS publication 519, U.S. Tax Guide for Aliens.
How Do I File a Return?
If you are a nonresident alien and had any income at all, you’ll need to file form 1040NR or 1040NR-EZ. Depending on the complexity of your financial situation you may be able to do this on your own, or you can use a service like Sprintax to assist you. If your only income from US sources is wages, salaries, tips, refunds of state and local income taxes, scholarship or fellowship grants, and you do not claim any dependents (e.g., you have no children), you may be able to use the shorter and easier 1040NR-EZ. Once you have all forms completed, you’ll need to calculate whether you owe taxes and if so, include a check for the exact amount.
Am I required to file a state tax return?
This depends on several factors. The most important is whether the state has an income tax. If your state does have an income tax, then requirements for international students are specific to that state. Factors include your residency status within your state, the income you earned in that state, and the filing threshold of that state’s tax authorities. Please consult a tax professional or consult the website of your state’s Department of Revenue (or equivalent office) for further details. You may also choose to pay a small fee to have Sprintax complete and file your state return, if required.
Note that many state tax forms require you to input information from your federal tax return. Therefore, it is advisable to complete your federal tax return first.
What Information and Documents Do I Need to Prepare my Tax Return?
You’ll need either an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN). If you don’t have one, you can apply for one by filling out Form W-7. You’ll also need Form W-2 (officially known as a Wage and Tax Statement), which your employer should provide to you at the beginning of the year for the previous year’s earnings and taxes withheld. If you received other forms of income, you may also need Form 1042-S. A tax professional or tax preparation software like Sprintax can help you identify additional forms required if you have received more specialized forms of income such as rental or investment income, or if you worked as an independent contractor.
What is the Process for Submitting my Tax Return?
Once you have all your federal forms filled out, you’ll need to calculate whether you owe any tax. If so, you’ll need to write a check for the exact amount, payable to the IRS. Instructions for mailing the funds to the IRS are available on the tax form and accompanying instructions.
The process is the same for any required state tax return, but you must submit it to your state’s Department of Revenue or equivalent office.
What Will Happen if I Don’t Submit a Tax Return?
If you don’t file a tax return, you may be subject to penalties and interest. Failure to comply with your tax obligations may also prevent you from obtaining a U.S. visa in the future.
Can MPOWER Assist in Any Way?
Yes! We’ve partnered with Sprintax, the only online federal and state self-prep tax software for non-residents in the U.S. When you create a Sprintax account, their system will assist you in preparing federal and state tax returns that are fully compliant with current regulations. They will also enable you to identify any tax deductions and exemptions to maximize your legal tax refund, plus their software will automatically check to see if you are eligible to reduce or waive your taxes as a result of a tax treaty between your country and the United States. 24/7 live chat assistance is also available to help you throughout the filing process.
Sprintax was used by over 165,000 international students last year, and the average Federal refund received by eligible students was over $1,000.
For MPOWER borrowers who are nonresidents and still in school, we’ve secured a special offer that will allow you to file your federal taxes and Form 8843 for free through Sprintax.
All you need to do is:
- Register with Sprintax.
- Complete the online questionnaire.
- Enter your unique code SpTx2019MPF51F in the box on the ‘Review your order’ page.
Then Sprintax will prepare your federal tax return!