A Tax Guide for F-1 International Students

Volare | March 2021 Newsletter

“The hardest thing in the world to understand is the income tax.” — Albert Einstein

Disclaimer: Volare does not provide tax, accounting, or legal advice. This blog has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, accounting, or legal advice. Please consult your own tax and accounting advisors before engaging in any transaction.

A Tax Preparation Overview

Filing taxes can be daunting, even to U.S citizens. These days, there are a variety of taxes imposed on us, such as income tax, property tax, sales tax, and federal tax.

Income tax season helps keep track of how much people are earning and ensures everyone is paying the correct amount in taxes. The amount that is withheld from each income source will determine whether you owe money, receive a refund, or balance out. The same applies to international students.

International students who have been in the US during the past calendar year are expected to file tax returns regardless of income. 

Tax obligations can differ between visas. While F-1 visa students don’t have to pay employment taxes, such as social security and Medicare, they are still subject to federal and state taxes for US-source income. M-1 visa students aren’t allowed to hold employment and are solely in the states for learning. Therefore, they are not required to file taxes. J-1 visa holders are similar to U.S. citizens and pay taxes based on the income they earn. However, regardless of income or visa, all international students have to complete Form 8843, which lets the IRS know how long you have been living in the states.

The way you handle taxes as an international student can have an impact on visa and citizenship applications in the future. If you aren’t sure where to start, check out our guide for more information on how to prepare and what you can expect:

1. Determine your residency status for tax purposes.

For international students, they typically are either:
∙ Resident alien, when you meet either the green card test or substantial presence test for the year or;
∙ Nonresident alien, when you are in the states but you are not a US citizen nor a resident alien for tax purposes.

For more instructions in determining your alien tax status, visit the IRS website.

2. Determine all your US income sources this past calendar year and gather any documents you have received from those sources.

Students pay taxes on the following types of income (though not limited to):
∙ Salaries, wages, and tips
∙ Taxable scholarships or fellowship grants
∙ Interest and dividends
∙ Prizes and awards
∙ Stipends from being an RA, TA, or other related positions

Income from scholarships that cover your tuition or money from your home country does not count.

3. Determine the appropriate tax forms from the IRS site based on your resident and income status.

Are you a…
∙ Nonresident alien with no source(s) of income? Form 8843
∙ Nonresident alien with source(s) of income? Form 8843 and the redesigned Form 1040NR. For 2020, the IRS said you will no longer use Form 1040-NR-EZ.
Resident alien with source(s) of income? Form 1040

4. Have all your general personal information and government-issued documents ready.

General personal information includes your passport, mailing address, bank account information, Form I-20, Form W-2 from your employer (if applicable), Form 1042S (if applicable), Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

If you have any US income source(s), make sure to have your W-2 or W-4 ready. If you haven’t received it yet, speak with your employer on when you can expect those documents.

5. Determine whether you will file using a social security number (SSN) or if you need to apply for an individual taxpayer identification number (ITIN).

According to the IRS, there are three ways to apply for a ITIN:
∙ “Mail your W-7, tax return, proof of identify, and any foreign status documents” or;
∙ “Apply in-person using an IRS-authorized Certifying Acceptance Agent” or;
∙ “Make an appointment at a designated IRS Taxpayer Assistance Center.”

Please note it can take up to seven weeks to hear back from the IRS upon completing your application and receiving an ITIN.

6. Reach out to a tax consultant or the international student office for any tax resources and advice while completing your tax form(s)

They can help answer any questions or concerns that are specific to your circumstances. Your school or local library could also have free tax resources available, and companies such as Sprintax offer live support and a plethora of articles you can use for reference.

From the IRS, students can also find Publication 519, which is intended to help those who aren’t considered a U.S. citizen and supply information you will need to file tax returns.

You can find the appropriate tax form(s) and other resources online at IRS.gov.

7. Mail your form before the deadline and remember to keep copies of all these forms for your own records upon completion.

Normally, the deadline is April 15th each year. However, this year’s deadline has been extended to May 17th due to the pandemic. If you happen to miss it, you could get a six month extension by filing another form. However, while it helps extend the deadline, it doesn’t negate the amount of money due as well as any penalties that could incur as a result. 

Where you send your F-1 tax return depends on the state you live in.

For more tax resources available to international students, please visit:

LewerMark Student Insurance Guide
Sprintax Guide
IRS Guide and Resources

Do you feel more prepared to take on taxes? What tips or advice have you found that has helped you navigate through tax season? 

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