2007 Tax Information for International Students and Scholars

Overview: Taxes and the IRS

The Internal Revenue Service (IRS) is the U.S. government agency that collects taxes. As a nonresident F-1 or J-1 student or scholar, you may need to file forms each year with the IRS, even if you earned no income. It is your individual responsibility to understand and meet your tax obligations. Generally, tax returns are due every April based on earnings from the previous year, though there are exceptions to this deadline.

While employers do deduct money from your paycheck throughout the year and send it to the IRS, it may not equal the exact amount owed at the end of the year. If too much was deducted, you may be eligible for a refund. Or, perhaps not enough was deducted, and you will owe more. Salary from a job is not the only kind of earning taxed; many types of income are taxable. Even if you did not work and do not owe any taxes, you will still need to submit a form to the IRS.

U.S. tax laws can be complex and confusing and the laws that apply to internationals are not the same as those that apply to U.S. citizens. These resources should help you to better understand your tax obligation, to learn what and where to research, and to successfully submit your tax forms.

Please note: Often students contact us with tax questions and sometimes we are able to help with the really basic issues. However, please remember staff members of WWU International Programs and Exchanges are not qualified tax officials (I can barely figure out my own taxes!) and are not able to advise students on tax-related issues.

How to file

You may download forms from the IRS Website and file by mail.

Tax professionals and certified tax accountants, who charge for their services, can assist you with your taxes.

Before You File

Before you begin the filing process, be sure you have all the necessary information with you.

• Form W-2 Wage and Tax Statement: W-2 forms are mailed to current and former employees. This form shows how much you earned last year and how much was taken out for taxes. You will only receive this form if you have been employed.
• 1042-S: The 1042-S form will only be given to nonresident alien students who have received scholarship or fellowship money that exceeds tuition and related fee charges. You will not receive a copy of the 1042-S form if you only have a tuition waiver on your account and do not receive any checks. 1042-S forms will be issued by WWU no later than March 15. If you expect to receive a 1042-S form, wait until it is issued before filing your tax return.
• Passport
• I-20 (F-1 status)
• DS-2019 (J-1 or J-2 status)
• Social Security number or Individual Tax Identification number (generally not required if you will file only Form 8843)
• U.S. entry and exit dates for current and past visits to U.S.
• Academic institution or host sponsor information (name, address, phone)
• Scholarship/fellowship grant letter (if any)
• A copy of last year's federal income tax return, if filed

Which form to use?

Your individual situation determines which form(s) to file. Forms come with instructions.

• If you received no U.S. source income in 2007 or earned wages that are less than the amount of one personal exemption ($3,400 for 2007) you must file Form 8843 by June 15, 2008. Download Form 8843 here
• If you received U.S. source income in excess of $3,400, had wages or scholarship income exempt by treaty, had taxable scholarship income or are due a refund of taxes, you must file Form 8843 AND 1040NR-EZ or 1040NR by April 15, 2008. The 1040NR-EZ is shorter and limited to specific situations, while the 1040NR accommodates all types of income.
• Depending on how much time you have spent in the U.S., you may be considered a resident for tax purposes. This is not related to your immigration status, as you may be in F-1 or J-1 nonimmigrant status while a resident for tax purposes only. If you are considered a resident for tax purposes, you will be taxed like a U.S. citizen and will file a 1040EZ or 1040 instead of the 1040NR by April 15, 2008.

• New mailing address for all non-resident alien tax forms:

  Internal Revenue Service, Austin, TX 73301

Resident or nonresident for tax purposes

In legal terms, noncitizens of the U.S. are called "aliens." There are three types of aliens for tax purposes: (1) nonresident, (2) dual-status, and (3) resident. These categories are for tax purposes only and are not related to your immigration status. You may be in F-1 or J-1 nonimmigrant status and considered a resident for tax purposes.

Substantial Presence: Nonresident aliens generally meet the substantial presence test if they have spent more than 183 days in the U.S. within the last three years. Having substantial presence in the U.S. generally means you will be considered a resident alien for tax purposes.

Exempt Individual: Any person who is temporarily exempt from the substantial presence test. Time spent in this category does not count toward the 183 days in the U.S. that normally will convert a nonresident alien into resident alien for tax purposes. F-1 and J-1 students maintaining status are exempt from the substantial presence test for 5 years. J-1 scholars are exempt from the substantial presence test only if they have been in the U.S. no more than 2 out of the last 6 years.

1040NR-EZ or 1040NR?

• You must determine whether Form 1040NR-EZ or 1040NR better fits your tax situation.
• You can use the 1040NR-EZ if all the following conditions are met:
• You do not claim any dependents.
• You cannot be claimed as a dependent on someone else's U.S. tax return.
• If you were married, you cannot claim an exemption for your spouse.
• Your taxable income is less than $100,000.
• You are not claiming any itemized deductions (other than for state and local income taxes).
• Your only U.S. source income is from wages, salaries, tips, taxable refunds of state and local income taxes, and scholarship or fellowship grants. (If you had taxable interest or dividend income, you cannot use this form.)
• You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded.
• You are not claiming any credits.
• The only taxes you owe are:
  • The income tax from the Tax Table.
  • The Social Security and Medicare tax on tip income not reported to your employer.
• You are not claiming a credit for excess Social Security and tier 1 RRTA tax withheld.
• This is not an "expatriation return." See instructions for Form 1040NR for more information.

If you do not meet all of the above conditions, you must file Form 1040NR.

Documents to save

Form W-2 Wage and Tax Statement: W-2 forms are mailed to current and former employees. This form shows how much you earned last year and how much was taken out for taxes.

1042S: The 1042S form will be given only to nonresident alien students who have received scholarship or fellowship money that exceeds their tuition and related fee charges. You will not receive a copy of the 1042S form if you have only a tuition waiver on your account and do not receive any checks.

Resources

• Internal Revenue Service
• Publication 519 U.S. Tax Guide for Aliens
• Publication 597: Information on the U.S. - Canada Income Tax Treaty
• Publication 901: U.S. Tax Treaties
• 2007 Foreign Student and Scholar This is a guide for volunteers who are training to help people prepare tax returns. The language is more user-friendly than the language in IRS publications, and it covers the same topics.
• VITA: Volunteer Income Tax Assistance Programs are volunteer-run, community tax assistance groups.
• Federal Income Tax Forms and Publications
• To find the location of your local tax offices in Washington State, go to http://www.irs.gov/localcontacts/article/0,,id=98343,00.html
• University of Texas at Austin Self-Help Tax Website

As well, we have been sent information about a company called IS Taxes that provides tax services specifically for international students, http://www.istaxes.com/ . Although IS Taxes does charge fees for their services, there is a lot of free information on the website that is worth checking out. Take a look at the links on the left side of the homepage. It is a resource that some of you may or may not want to use. If anyone finds their services useful (or not), please let me know for future reference.

Filing tips

• Make photocopies of your documents for your records.
• Be careful to complete the correct form; it is easy to mix up 1040NR with the 1040, for instance.
• Sign and date all forms, and be sure to mail them before the stated deadline.

Identity theft

Please be careful of fraudulent scams and internet "phishing" that use the IRS name or other tax-related references to gain access to your personal information in order to commit identity theft.

Past examples have included:

• Suspicious e-mails which claim to be from the IRS and offer a tax refund. The email requests your Social Security number and other personal information in order to process the refund.
• Fake IRS correspondence and an altered Form W-8BEN, "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding" are sent to nonresident aliens who have invested in U.S. property and have U.S.-source income. The false form asks for personal and financial information which is not normally collected on the W-8BEN.

These are just two examples of many possible types of scams. Do not respond to such emails or contacts. The IRS does not send unsolicited emails or request personal information by email. It also does not request PIN numbers, passwords, or similar secret access information to individuals' credit cards, banks or other financial accounts. You can report phishing scams to the IRS and read more information at: http://www.irs.gov/newsroom/article/0,,id=155682,00.html.