Every year, Americans complain about paying taxes. But if you thought you were in the clear because you’re 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. It’s 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, that’s because it is. Before you start collecting your documents or filing anything, be in touch with your school’s international student center for help navigating the process or consider consulting a professional tax advisor.
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 don’t apply towards taxes, however, and you can check the Department of Homeland Security’s website to see which list you’re 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 you’ve 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 they’re paid for the practical training.
If you’re 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. Don’t 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.
Here’s an easy way to think about it: By definition, M-1 visa holders don’t pay taxes because they’re in the USA only to learn and therefore don’t 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, you’ll 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 doesn’t 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 you’re starting to worry about tax identification numbers, don’t. If you didn’t receive any income and only need to file Form 8843, then you don’t 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 can’t e-file Form 1040NR-EZ. Other e-filing services are available, but remember that some of those services may charge you.