Start a "personal tax folder"
that you can easily find each year. Write down the date (month/day/year) you entered the U.S. as an F-1
student for the first time. Keep a log of each departure and
entry date thereafter. Also, count the number of days you were
present during each tax year, deducting whole days you spent outside
the U.S. Keep a copy of the Form 8843
that you have filed for each tax year in a personal tax folder.
)." However, if you expect to remain in the U.S. more than 6
years, you should file as a resident alien, unless you choose to hold
on to your nonresident status for as long as you legally can (to
avoid being taxed similar to a U.S. citizen). Most students do not have
to worry about making these choices, if the financial gain or loss is not an
issue .
Essential tax forms
When you obtain a job on campus, or if you receive a
room-and-board scholarship, you must make an appointment with the Payroll
Office for a “tax interview." Take your passport, Form I-20 and Form
I-94. If you are considered a nonresident alien for the tax
year,
fill out a Form W-4 as follows:
1. Check “Single” marital status (regardless of your actual
marital status), unless you are a resident of Canada, Mexico, Japan,
Korea, or India with dependents (consult IRS Publication 519).
2. On line 5, claim only one withholding allowance, unless you are a
resident of Canada, Mexico, Japan, Korea, or India (consult IRS
Publication 519).
3. On line 6, request that your employer withhold an additional
amount of 15.00 biweekly.
4. On line 7, do not claim exemption from withholding!
Unless there is a U.S. tax treaty for
your country of residence that states otherwise, income taxes must be
withheld (deducted) by the payer at the time of payment of wages, or
in the case of a room-and-board scholarship, billed to your student
account. The amount of tax withheld is paid
directly to the U.S. Treasury in your name.
By the end of January of each year,
you will receive important tax documents pertaining to the preceding tax year.
For example, if you paid tuition, you will receive a Form
1098T. If you worked on
campus, you will receive a Form W-2 from the
Payroll Office, or from non-Pepperdine firms Sodexho (food services) or Follett
(bookstores). If you received a room and board scholarship, you
will receive a Form 1042S. Be sure that your
mailing addresss is correct so that you will receive the tax documents in time to
file your tax return by the April 15 filing deadline. Below is a list
of the most commonly received documents.
• Form 1098T, Tuition Statement
• Form W-2, Wage and Tax Statement
• Form 1042S, Foreign Person’s U.S. Source Income Subject to
Withholding
• Form 1099-INT, Interest Income
• Form 1099-MISC, Miscellaneous Income
• Form 1099-G, Certain Government Payments (report of state income
tax refund received for the previous tax year)
After you receive all of the tax
forms that pertain to you, you must file
what is commonly called a “tax return” with the IRS. The
tax return is an IRS form (usually the Form 1040NR-EZ
or Form 1040EZ,
depending on your filing status) that you will complete in order
to report your income, the taxes paid, and any specific
information that may result in your getting a tax refund, or paying
additional taxes you owe. You may be able to take "deductions"
or "exemptions" that will lower your tax liability and increase your refund.
The filing deadline is April 15. During February
and
March, the OISS will
provide more information to help you file your tax return along with
the mandatory Form 8843.
What about off-campus employment?
Before you accept any type of work off campus, you must follow the
necessary steps to obtain employment authorization for CPT, OPT
or employment based on economic hardship. You must provide your employer information
that will determine your correct tax status. If your status is
nonresident alien (see above), inform your employer
that you are not subject to Social Security and Medicare
taxes.
Can students receive any other type of income?
If you invest in stocks
or real property, you may receive income such as interest or dividends,
rent, or capital gains. You may receive gambling winnings or prizes, perhaps even
alimony and royalties. Before engaging in any activity that
leads to receiving income, you must make sure that you are not violating
your visa status by doing so.
What are the consequences of not filing tax forms?
You are responsible for mailing the tax forms to the IRS and
keeping a copy. Neglecting to do so, or filing the forms
incorrectly, can result in severe penalties, including fines and
interest on unpaid taxes. It can also impact future nonimmigrant or
immigrant visa applications. If taxes were not withheld, and
you do not file a tax return, you may receive a letter from the IRS
years later, asking you to pay the taxes plus thousands of dollars
more in penalty
fees.
A few general rules for F-1 students while they
are considered nonresident aliens for tax purposes:
1. Taxes must be withheld at the time income is received.
2. Residents of countries that have tax treaties with the U.S. may
be exempt from tax on certain amounts of certain income received from
U.S. sources.
3. Interest received on deposits held in the “banking business” is
not taxable, unless the nonresident holds large sums in a bank for
the purpose of earning money.
4. Scholarships that cover tuition, fees, books, supplies and
equipment that a student is required to buy, are not taxable. Amounts
used for other purposes, such as room and board, are taxable.
5. Income for services performed by nonresident aliens in F-1
status is not subject to withholding of Social Security or Medicare
taxes.
Where else can I get help?
The OISS will provide further information via the "OISS Communique" emails.
You are advised to seek
advice from a tax professional, preferably an "enrolled agent" with
expertise in nonresident tax issues.
Tax forms and publications can
be downloaded from the IRS website.
California state tax forms and publications can be downloaded from
the California Franchise Tax Board.
For more tax information for International Students, please visit
http://www.irs.gov/businesses/small/international/index.html.
IRS Publication 519, US Tax Guide for Aliens, includes information on
how to determine residence or nonresident status for tax purposes;
what types of income are taxable; the effect of tax treaties on tax
liability; how to claim exemption by treaty; and much more.
IRS Publication 901, US Tax Treaties, lists treaties in effect at the
time of publication each year, with brief synopses of tax treaty articles
relating to students and scholars.
• IRS tax assistance
800-829-1040
• Automated Refund Service
800-829-4477
Revised 8/10/2007
