How to File Taxes as an International Student
Jonathan Perez | Dec 01, 2023 Student Life
As an international student, filing taxes may not be on the top of your list of priorities, but it has a significant impact on your future immigration status, especially if you want to prolong your stay in the U.S. You may face a potential revocation of your visa or possible denial for a green card when applying.
Some Background On Tax Filing
The process of filing taxes can sound complicated, especially for first timers not from the U.S. Here are some quick facts about a few visa statuses and their eligibility to file:
- F1 visa holders, especially students, do not need to pay employment taxes but are required to pay federal and state income taxes.
- J1 visa holders and those on OPT do pay taxes on earned income.
- “Income” is defined as any taxable earnings, scholarships, grants, and stipends that are not related to a student loan.
- For F, J, and even M visa holders, you are considered a non-resident alien for your taxes if you have been in the U.S. for less than 5 calendar years, and a resident alien if you have been in the U.S. for over 5 calendar years.
- H1B holders are taxed on income that you earn in the U.S. at the same tax rate as U.S. citizens.
There is no minimum dollar amount of income that makes it necessary to file taxes for international students. However, if you are making an income in the United States, you will need to pay taxes on behalf of:
- Wages and salaries
- You will also need to have or apply for a social security number for your taxes if you work in the U.S. and receive taxable employment compensation. If ineleigible, you can apply for an individual taxpayer identification number (ITIN) from the IRS for your forms.
- Taxable scholarships/fellowship grants (your school will send you a an 1040-S in these cases)
- Financial prizes/awards
You do not need to file taxes on income from:
- Foreign sources
- Interest income from a U.S. bank
- A tax-free scholarship or fellowship
- Certain types of tax-free investments
A Step-By-Step Guide on Filing Your Taxes
If you are a non-resident alien, you must first understand that traditional tax preparation products like TurboTax and TaxAct do not have the capability to function for this group, as tax rates in these programs are calculated differently from those that international students use.
If you plan on filing your taxes on your own, you should follow these steps:
- Determine your residence status
- Locate any income from U.S. sources in the previous year
- Find out the forms you have to fill out
- Provide certain documents (a W-4, 1099, etc.) to properly fill your form out
- Learn how much you will owe, or if you are owed a refund
- Ensure your documents match your information and that all addresses are correct, as well as your math.
- Send hardcopy documents to the correct IRS address, the location of which will vary depending on the forms provided
Important Deadlines and Forms
An incredibly important document when filing income taxes as an international student is the form 1040NR – this is the primary document necessary for filing a tax return. This document is necessary only if you have received wages or taxable scholarships (like the ones mentioned above) by April 15.
Another important form that students should keep in mind is Form 8843 . This document is not a tax form, but rather a statement that you provide to the U.S. Government showing your information for tax purposes, and is required from those with F1, F2, J1, or J2 statuses even if they did not receive U.S. -sourced income that year.
Keep in mind that the Form 8843 needs to be submitted to the Department of Treasury Internal Revenue Service Center in Austin, Texas by June 15th of the year following the close of the tax year. This document is crucial for informing the number of days you spent in the United States, and can affect how any future income is taxed.
Please also note that if you live in the states of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming, there are no tax-filing requirements on the state level. You will still have to prepare and file a Federal Income Tax return.
Health Insurance and Your Taxes
Your health insurance is something that should be reported on your taxes, notably with a form 1095-A, 1095-B, or 1095-C. Each of these forms is received from a certain origin, but the only one that is required for your taxes is the 1095-A, which is received when you buy an insurance plan off the Health Insurance Marketplace. Filing taxes for these plans may earn you tax credits for health insurance premiums purchased only via this method.
ISO plans have very comprehensive and affordable coverage, but our plans are not ACA Compliant. In these cases, this information does not have to be reported via your taxes, and any forms you might receive from insurance companies outside of those from the insurance marketplace are for informational purposes only. You can find more information about our plans at www.isoa.org.
About ISO Student Health Insurance
Founded in 1958, ISO prides itself on being the leader in providing international students with affordable insurance plans. Administered by former and current international students, we are able to assist our member with multilingual customer service in Chinese, Hindi, Spanish, and more. ISO serves over 3,200 schools/colleges and more than 150,000 insured students every year.
For more information, please visit www.isoa.org and connect with us on Facebook, Instagram, WeChat, WhatsApp, and LinkedIn.