퍼온 글입니다. F1 Student Tax Filing, F1 OPT Social Security & Medicare Taxes Exemption and Return May 28, 2019 Max Troy All international students who make money while in the United States are subject to taxation and U.S. tax laws. But, as an international student, you may be classified as an exempt individual and non-resident for tax purposes, which means you are not supposed to pay tax on your income earned. OPT Students program is used to gain practical training and expertise in the major field of studies. F1 students also earns extra income and this helps to cover their education and other living expenses in the USA. Any income in the USA will certainly catch the attention of the IRS (Internal Revenue Service). So now the question might arise if F1 students need to pay F1 student tax or OPT tax? Everything About F1 Student Tax or OPT Tax : F-1 Visa does not let you pay for Social Security tax/ Medicare tax while on F1 status, Which means whether you are doing CPT, OPT or on OPT Extension, you do not have to pay those taxes unless you are in the United States for more than 5 years on F1 OPT social security tax. Do F1 OPT Students Need to Pay U.S. Taxes? F-1 Visa does not let you pay for F1 student tax while on F1 status, Which means whether you are doing CPT, OPT or on OPT Extension, you do not have to pay those taxes, or unless you are in United States for more than 5 years. Students earning an income from an OPT program are required to pay taxes according to U.S. laws. Your tax status will determine the type of taxes you will need to pay. So let’s take a look at how you can determine if you need to pay tax or not depending on your stay in the USA. Students on OPT are required to pay taxes on their income, according to U.S. laws and will complete a W-4 from their new employer before they begin to get paid, which fall under the category of OPT Tax. Your tax status will be depending on your period of stay in the USA. If you have passed 5 years waiver period from significance present test while on F1 (before OPT), you will pay the same taxes. The US tax percentage for OPT as well as individual students ranges from 10% to 39.6% Tax rate depending on your income level. NRA Tax and FICA Tax There are two types of taxes for the F1 OPT students to pay while they stay in the U.S. They are the Medicare and Social Security tax, which are collectively called the FICA tax. All U.S. tax residents need to pay FICA tax from their salaries. This also includes F-1 students who have been in the U.S. for more than five years. The IRS has, however, decided that an NRA F-1 student (someone who has spent less than five years in the U.S.) does not have to pay FICA tax Guide to F1 visa Tax Exemption F1 visa Tax Exemption deals with the Social Security/ Medicare Tax Liability, which means that foreign students in F-1 or another nonimmigrant status who have been in the United States for less than 5 calendar years and are still NONRESIDENT ALIENS are exempted from social security/ Medicare taxes that is the FICA Tax. Based on IRS Pub 519, F1, J1 students are exempt for up to five years during their non-immigrant status as a full-time student in the United States under Student FICA tax exemption. How to File F1 Visa Tax/ How to File F1 OPT Tax Return Filing taxes in the United States for an International student can be an intimidating task for some students. How do you feel about filing taxes? Here’s a quick guide for international students who will be filing their first tax returns as an International student in the United States. Steps to follow while filing for taxes or tax return:
Determine Your Residency Tax Status
There are two types of people we need to distinguish between. One of them is the resident, and the other is the Non-Resident Alien (NRA). Students and graduates who are on an F-1 visa and are staying in the U.S. for less than five years are Non-Resident Aliens for tax purposes, but for students who have been in the USA for more than five years are considered residents and will need to pay tax. Although having a resident tax status does not make you a permanent resident of the USA when it is related to your immigration status. Your tax status only depends upon the amount of time you’ve spent in the U.S., while your immigration status depends on the type of visa you hold. International students on F, J, M, or Q visas are considered “exempt individuals,” which means you are exempt from the SPT for the first 5 years or any part of 5 or fewer calendar years, you are in the US if you are an international student or the first 2 years if you are a scholar. Exempt individuals are and automatically a non -resident for tax purposes. After this period of 5 years, you will have to undergo the Substantial Presence Test, to determine if you were in the US long enough to be considered a resident for tax purposes or say for proof of your resident stay. Substantial Presence Test The Substantial Presence Test (SPT) is a norm used by the Internal Revenue Service (IRS) within the United States to conclude whether an individual who is not a citizen or lawful permanent resident in the recent past certifies as a “resident for tax purposes” or a “nonresident for tax purposes”; it is a form of physical presence test. H -1B Temporary Workers must always take the SPT to determine their tax status. Unlike individuals in F and J status, H -1B Temporary Workers have no period of exemption from the SPT.
Determine your income from U.S. sources (if any)
Do you have an ITIN yet?
If you have filed for tax previously in last years, you may already have an ITIN number. You have to need ITIN for form 84843b
Get your combination of tax forms printed
Gather all income and tax-related documents received from your employers
Complete the forms (get a professional tax practitioner to help if you don’t know how the forms work or need to be completed)
Assess whether you owe any additional taxes (and find a suitable way to pay like a check, for instance)
Mail your completed tax forms and copies of your W-2’s, 1099’s, and 1042-S’s to the appropriate addresses
The Social Security/Medicare Tax Liability The Internal Revenue Code (IRC) sets the liability for social security and Medicare taxes on both the employer and the employee, who earns income from wages in the United States. The IRC also gifts an exemption from security/Medicare taxes to alien students, scholars, teachers, researchers, trainees, physicians, au pairs, and other non-immigrants temporarily present or entered the United States on F-1, J-1, M-1, Q status as a non-resident alien. Non-resident alien temporarily present in the United States is exempt from wages paid to them for services performed within the United States as long as such services are permitted by USCIS and are performed to carry out the purposes for which for non-immigrant status visas were issued to them. Exempt Employment includes:
On-campus student employment up to 20 hours a week (40 hrs. during summer vacations).
Off-campus student employment allowed by USCIS.
Practical Training student employment on or off-campus.
Employment as a professor, teacher, or researcher.
Employment as a physician, au pair, or summer camp worker.
Limitations on the exemption:
The exemption does not apply to spouses and children in F-2, J-2, M-2, or Q-3 nonimmigrant status.
The exemption does not apply to employment not allowed by USCIS or to employment not closely connected to the purpose for which the visa was issued.
The exemption does not apply to F, J, M, or Q non-immigrants who change to an immigration status which is not exempt or to a special protected status.
The exemption does not apply to F-1, J-1, M-1, or Q-1/Q-2 non-immigrants who become resident aliens.
Self-Employment Tax Liability The Internal Revenue Code sets the self-employment tax on the self-employment gain of any person within the United States who has such self-employment financial gain. However, the IRC also gifts an exemption from self-employment tax on the self-employment income of NONRESIDENT ALIENS. A NONRESIDENT ALIEN is simply not chargeable for the self-employment tax. Nevertheless, if an alien individual becomes a RESIDENT ALIEN underneath the residency rules of the Code, he then specifically becomes accountable for self-employment taxes under the same conditions as a U.S. citizen. Filing F1 Student tax returns for International students in USA Every international student staying in the United States is required to file a tax return as a compulsion of your visa, but not everyone will pay taxes to the American government. International students are granted with a number of benefits and exemptions, so many will not owe anything. If at all you happen to pay a lot of tax, chances are you might even get a refund check. Performing Tax Planning Strategies for University Students is an important task that should be followed systematically to better management of finances. If you belong to the category of people who are going to file their taxes for the first time then, it can be an overwhelming procedure. Once you start earning money, you may get one or two W-2 forms from your employer, overall filing tax returns for an international student doesn’t consume a lot of time. Most likely you are using the Standard deductions with tax treaty which benefits your country. The Standard Deduction is a specific dollar amount that decreases the amount of income on which you are taxed. Your Standard Deduction may include the basic standard deduction and additional standard deduction amounts for age and blindness. As per IRS – Nonresident aliens cannot claim a standard deduction unless they are filing Form 1040. A majority of international students within the USA would file Form 1040NR-EZ or 1040NR until they become a Resident Alien. All international students residing in the United States must file their tax returns every year. In this year I.e. 2019 one needs to file taxes before April 15th. An International student tax refund can only be availed by students who qualify for a refund due to tax treaties and a lack of serious income if they have earned income in the US. Students on F1 visas are taxed as non-resident aliens until they have stayed for a period of more than 5 years, hence they don’t pay the FICA taxes. Non-residents cannot claim the standard deduction and the only allowed itemized tax deductions for F1 students is state taxes paid. Collect Relevant Tax Documents for F1 Tax Filing For completing your tax paperwork, you should have the following documents checklist:
Most recent immigration status documents (e.g. I-20 or DS-2019)
All relevant tax documentation from employers, stipend providers, or other relevant entities who provides taxable money (e.g. W-2, 1042-S and/or 1099).
A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld If at all you received a reportable income, you must wait to receive all appropriate documents before completing your tax return. There is no chance of altering or editing your tax documents after you submit them to the IRS.
A copy of the page from your passport showing the visa stamp
All US entry and exit dates – INS Form I-94,
Social Security Number (SSN) or Individual Taxpayer Identification Number(ITIN), if you have one If your ITIN application is still pending and you won’t receive it before the filing deadline, you can apply for a tax-filing extension with the IRS.
We highly recommend you attend a tax workshop before filing tax documents
List of Federal Tax Forms: Filing of forms will depend on your residency status, US source income in the previous calendar year, whether you need to apply for an ITIN, claim a tax treaty benefit, and a refund on Social Security and Medicare taxes. All the forms can be downloaded from the