How do I know if I have to file a federal income tax return?
- The instructions for the return give the filing thresholds which is the amount
of income that you have to have in order to have a tax filing obligation. The
rules are different for Form 1040 and1040EZ which is for U.S. citizens and resident
aliens than they are for Form 1040NR and1040NR-EZ for nonresident aliens. The
rules are also different for the state tax returns.
For example, for 2008:
- Residents do not have to file a Form 1040 if their income is less than $8,950 for single or married filing separately status and nobody can claim them as a dependent, or $17,900 for married-filing-jointly status.
- Nonresidents do not have to file if their only income was wages that did not exceed the personal exemption amount ($3,500 in 2008).
- Nonresidents do not have to file a Form 1040NR if their only income was investment
income on which the correct amount of tax was withheld.
However, individuals who anticipate having an immigration proceeding which will require submission of U.S. tax returns may wish to file a tax return even if they are under the filing thresholds. Immigration service personnel are not generally aware of the tax return filing requirements especially for nonresident aliens.
How do I get back the federal and state taxes that were withheld if I have no filing requirement?
- You will have to submit federal and state returns in order to obtain a refund of the withheld taxes. Many states allow you to file an abbreviated tax return in such cases.
Do I need to file anything at all if my wages were under $3,500?
- There is a rule that eliminates the tax return filing obligation of nonresident aliens whose only U.S. income is wages that do not exceed the personal exemption amount ($3,500 for 2008).
- If you had taxes withheld from your wages, you will have to file a tax return in order to obtain a refund of those taxes. Also, if you will need a U.S. tax return for an immigration proceeding, you can file the return even if it is not required. (The immigration service personnel are not necessarily conversant with the U.S. tax return filing requirements and may expect you to produce a U.S. tax return if you had U.S. wages).
- You are, however, supposed to submit a Form 8843, Statement for Exempt Individuals, if you are a nonresident alien in F, J, M, or Q status and the reason that you are a nonresident alien is because you were exempt from counting U.S. days while in that status. For foreign students in F, J, and M status, you have this requirement for the first 5 calendar years, after which you will count your U.S. days and become a resident alien if you have 183 countable U.S. days.
All of my income was exempt from tax under an income tax treaty with my home country. Do I still have to file a tax return?
- Yes. Even if you had no taxes withheld on your income because you were exempt from withholding because of the treaty benefit, you are required to submit a tax return to describe the treaty claim to the IRS.
If I would like to get a green card, do I need to file a tax return?
- The application for U.S. lawful permanent resident status (a green card) requires the applicant to submit the three most recent years’ tax returns. If you had a tax return filing obligation and did not file your returns, the immigration service will not accept your application.
If I haven’t filed my taxes in the past, but want to get a green card, what do I do?
- You need to complete and submit your back tax returns for at least the last six years, or the years that tax returns were due if fewer than six years.
Where can I get forms to file prior years’ tax returns?
- Visit the website for the tax authority for prior years’ forms. For federal tax returns, you can obtain forms on the IRS website at www.irs.gov. Click on forms. There are links for prior years’ returns.
Can I send different tax forms together?
- You should send tax returns and their related forms and tax payments, if any, in separate envelops to the address indicated in the instructions for the form. Do not send state income tax returns (Form 1 or 1NR/PY for Massachusetts) with your federal tax returns! Do not combine tax payments for more than one tax year in one check. The IRS will apply it to only one year. They will send you a refund for the excess and a bill for the taxes due on the second return.
I am a nonresident alien. How do I know whether I should file a Form 1040NR or a Form 1040NR-EZ?
- Form 1040NR-EZ was designed specifically for foreign students and scholars. The first page of the instructions gives the conditions that you must meet to use this form. They are:
1. No dependents
2. Not claimed as a dependent by another U.S. taxpayer
3. Income consists of only wages, tips, taxable scholarships or Fellowships, state tax refunds
4. Taxable income is under $100,000
5. No exemption claimed for a spouse if married
6. Only income exclusions are the student loan interest and nontaxable scholarship and fellowship grants.
7. Only deductions are state/local taxes (line 4)
(But residents from India who are students or business apprentices can claim the standard deduction on line 11.)
8. No tax credits except the federal excise tax refund credit (line 21)
Can I e-file?
- If you are a resident alien, you can e-file using one of the popular tax preparation packages or the IRS tax preparation service if you qualify. If you have complicated issues related to foreign income, you may have to use a paid preparer but you may be able to e-file that tax return. You may not be able to e-file some of the disclosure forms.
- If you are a nonresident alien, you cannot e-file. If you do, you may be overstating your deductions and paying less in taxes than you are obligated for as a nonresident alien.
- You may be able to e-file your state return.
Can my wife and I file a tax return together?
- If both you and your wife are nonresident aliens because you are an F-1 student and she is in F-2 status or you are in J-1 status and she is in J-2 status, the answer is generally no for federal income tax purposes. In limited cases, a spousal exemption may be claimed, but this is not the same as filing a joint return and is discussed in the “exemptions” section of the instructions for the 1040NR. State filing rules may be different
- However, there are some elections that may apply if either you or your wife is in a different immigration status such as H-1B or O-1, or if one of you is a U.S. citizen or permanent resident. For example, if one (or both) of you is a resident alien or a part-year resident alien under the 183-day residency formula, you and your wife can make an election to file jointly as resident aliens. If neither of you is a resident alien or a part-year resident alien, you may be able to make a first-year choice election to be a part-year resident if you meet certain specified requirements. Then you and your wife can make the joint election to file as residents. When you make a residency election, you both have to include your worldwide income from January 1, of the previous year in the return. For information on how to make these elections, refer to IRS Publication 519, U.S. Tax Guide for Aliens.
I have a child who is a U.S. citizen with a Social Security number. Can I claim him as a dependent on my return?
- If you are a nonresident alien, you can only claim dependents if you are in one of the following categories:
- A resident of Canada or Mexico
- A resident of South Korea and you dependent lived with you in the United States at some time in the tax year.
- A U.S. national.
- A resident from India who is a student or business apprentice.
If you are not in one of these categories, you cannot claim a personal exemption for your dependent even if your dependent is a U.S. citizen.
If you are a resident alien, you can claim your dependents who meet the conditions of being a dependent and who are:
- A U.S. citizen or resident
- resident of Canada or Mexico
- A U.S. national
If I worked without authorization, am I turning myself in if I report the income on my tax return?
- No, under the current nondisclosure laws for income tax information, the IRS cannot disclose your tax return information to the immigration service. However, if you are involved in an immigration proceeding, the immigration rules may require that you submit to them copies of your U.S. income tax returns. The procedures for application for a green card require U.S. returns for the most recent three years and for naturalization, 5 years (3 years if married to a U.S. citizen).
I am a J-2 dependent with an Employment Authorization Document (EAD) from the immigration service. I have been working as a consultant. What tax form do I file?
- As a foreign national with an unrestricted EAD, you are allowed to be engaged in self-employment activities. You would complete a Schedule C or C-EZ to determine your net self-employment income and record this amount on the appropriate line of your Form 1040NR if you are a nonresident alien or Form 1040 if you are a resident alien. As a resident alien you would complete a Schedule SE as well to determine your self-employment (SECA) tax which is in addition to your income tax. Nonresident aliens are not subject to SECA.
Can non-U.S. citizens file as head-of-household?
- If you are a resident alien with a qualifying dependent, you can file as head-of-household.
Your dependent will need a U.S. taxpayer identification number, either a Social
Security number or individual taxpayer identification number.
If you are a nonresident alien, you cannot file as head-of-household. Nonresident aliens can only use single or married-filing-separately status.
- There are some tax preparation software products that help you complete Form 1040NR or 1040NR-EZ and Form 8843 but they do not deal with state income tax returns. Also, they may not complete an accurate tax return if you changed immigration status and remained a nonresident alien. You can find these programs by doing a Google search on “nonresident tax return.”
- There are no tax preparation software programs that determine your tax residency status, whether treaty benefits are available, what tax returns to file, and what elections are available, and then completes the state returns along with the federal returns which would depend on whether you were a nonresident alien (Form 1040NR or 1040NR-EZ), a full-year resident alien (Form 1040 or 1040EZ) or a dual-status taxpayer (because you became a resident in the year but was not present on January 1 or January 1 was not a countable U.S. day).
- Personnel at the popular tax preparation service firms are generally not experienced in dealing with foreign nationals and frequently prepare incorrect returns as a result. Some tax accounting and law firms have sophisticated software packages that can do all of the returns but the analysis as to the availability of income tax treaties and elections (which could result in lower taxes) must be done by the tax accountant or lawyer. Few tax accountants and lawyers deal with these issues on a regular basis and, as a result, may prepare incorrect returns as well.
I came to the United States as a student and then changed to H-1B. My tax accountant has been preparing Form 1040NR-EZ for me each year. Is that correct?
- No, unless you spend significant periods of time outside the U.S. each year. You
would most likely have become a resident alien for income tax purposes at least
by your second calendar year in H-1B status because all of your U.S. days count
for purposes of the 183-day tax residency formula (called the “substantial presence
test”). Depending on how long you were in the United States as a student and
when you changed status to H-1B, you could have been a dual-status taxpayer in
the year your status changed.
You can correct the tax returns that are still within 3 years from the date that you filed them by submitting a Form 1040X amended return. You may get a refund since as a resident alien you are eligible to claim the standard deduction which may be higher than the itemized deductions that you claimed as a nonresident alien.
If I have been here for over five years and have no income at all do I have to file taxes?
- If you have no income, you do not have to file a tax return. However, if you are an exempt individual in F, J, M, or Q status, you should submit a Form 8843. If you are an F or J student or student dependent who has been in the United States before 2008 (for any day) in more than 5 calendar years in that status, you are not required to file Form 8843 for 2008 and have no tax filing obligation.
What happens if I don’t send in Form 8843?
- Form 8843, Statement for Exempt Individuals and Individuals Claiming a Medical Condition is required by the regulations to be submitted by all individuals in F, J, M, or Q status who are exempt from counting days for purposes of the substantial presence test (the 183-day residency formula). The form should be attached to Form 1040NR or 1040NR-EZ if you have a return filing obligation. Otherwise, the Form 8843 should be signed and dated and submitted separately.
- The instructions to the form state that the penalty for individuals claiming a medical condition or professional athletes engaged in a charitable event is that they will not be able to exclude their U.S. days. The instructions do not provide a penalty for exempt individuals who do not submit the form. However, if you expect to apply for future immigration benefits, it is best to submit all required tax forms including Form 8843, which is an information return. Keep a copy of the form as proof of its submission. Some individuals submit the Form 8843 with a Form 1040NR-EZ with not income so that the form will be recorded by the IRS as having been submitted.
I am on Optional Practical Training (OPT); do I include OPT dates as F-1 dates on Form 8843?
- Yes, OPT is issued under your F-1 student status. You are still considered to be an F-1 student for federal income tax purposes.
As a Non Resident Alien am I required to file a tax return with the federal government each year?
- Yes, you are required to complete a form and file it with the Internal Revenue Service each year. These returns are due to be filed each year by April 15.
Do I need a Social Security Number?
- If you are employed at WVU you will need a Social Security Number (SSN). If you don’t have an SSN you will need to apply for one from the Social Security Administration. This is done by completing Form SS-5, Application for Social Security Number. You will also need a letter from the International Students and Scholars Services (ISSS). You can apply in person at the local Social Security Office. The Form SS-5 is available on the Internal Revenue Service website at www.irs.gov, click on forms and publications, then form and instruction number, and scroll through a listing of form numbers until you see Form SS-5. You will receive a receipt from the Social Security Administration at the time of application. Approximately six to eight weeks later you will receive the actual social security number. If you are not employed by WVU (for instance only receiving a scholarship or fellowship with no work or service requirement you are not eligible for a social security number and you will need to apply for and ITIN (Individual Identification Number) from the Internal Revenue Service – see below, “What is an ITIN Number?”.
- Please reference “International Payroll Processing Info” on the website to view specifics regarding International Payroll Processing for WVU.
- Please reference http://www.socialsecurity.gov/pubs/EN-05-10181.pdf and http://www.socialsecurity.gov/pubs/EN-05-10096.pdf for more precise information regarding Social Security Numbers.
What do I do with the Social Security Number once I receive it?
- You should notify the Admissions and Records Office of your valid social security number and you must also notify the Tax Services department at the Waterfront building. These notifications are necessary as you may have been assigned a “temporary” number until you have received your valid Social Security Number.
What’s an ITIN number? Is it the same as a Social Security Number?
- An ITIN (Individual Taxpayer Identification Number) is a number assigned by the
Internal Revenue Service, not the Social Security Administration. It is not the
same as a social security number, as an ITIN is not to be used for employment
purposes. An ITIN number is only used for tax purposes. That is, in order to
be employed you need an SSN. If you are just receiving a scholarship or fellowship
and are not employed otherwise, then you need an ITIN.
You must apply for an ITIN using a form W-7. The W-7 is available on the IRS website at www.irs.gov, click on forms and instructions then forms and instruction number and scroll to the W-7 form. The W-7 form must be mailed to the IRS office at the address in the instructions with the W-7 form. You cannot take it to the IRS office nor is it to be mailed to the WVU Tax Services department. The IRS is the agency that issues the ITIN. Do not send original documents with the W-7 form and insure that you follow the directions in the instructions for additional documents you must attach to the W-7 – some of which may require they be ‘notarized’ by a notary public. You will also need a letter from the Office of International Students and Scholars to accompany your form W-7 stating you are not employed by the University and do not qualify for a social security number.
- Please reference http://www.irs.gov/Individuals/General-ITIN-Information for more specifics regarding general ITIN information.
What do I do with the ITIN (Individual Taxpayer Identification Number) once I receive it?
- When the ITIN number is received from the IRS you will need to notify the Tax Services department.
I’ve heard of CINTAX, what is that?
- CINTAX is a tax return preparation system. WVU offers this software for free to foreign nationals. Each year you will be required to file a federal income tax return. The CINTAX system only prepares Form 1040NR for non-resident aliens. It does not prepare Form 1040, used by permanent resident aliens. It is to be used only by WVU international students/researchers/scholars.