What You Need to Know as an International Student in the U.S.
More than 1 million of international students come to the US for education. While filing tax might not be the most exciting aspect of international student life in the US, it is important to understand US taxation and ensure you are in compliance while you stay in the US. Missing tax filing can result in problems with your visa or possible ineligibility for a green
card in the future.
Similar to Americans, international students are required to file tax returns. The tax filing in the US has a strict deadline of April 15th (October 15th if you file an extension). If you miss the deadline, there may be penalty. As a F1 visa holder, you are considered Non-resident alien for tax purposes for the first five years when you stay in the US. After
five-year period, your residency status will be determined by the total days you spend in United States in a year or if you have green card or become a US citizen at that time. If you are not a US citizen or green card holder and you spend more than 183 days in the US, you are considered a US resident alien for tax purposes.
Non-resident alien is only taxed on the income sourced to the US. If you earn income in the US, you are required to file a US tax return. If you don’t earn any income while staying in the US, you only need to file a Form 8843 every year. Resident alien is taxed on the worldwide income which means that if you have foreign source of income, you are also required to report it on your US tax return. If you pay tax to the foreign country, you may
be eligible to claim a foreign tax credit on your US tax return to avoid the double taxation.
As an international student, there are tax treaties benefits that you are allowed to claim. The United States has income tax treaties with a number of foreign countries. The most common benefit that an international student can claim is that students from certain countries, for example, China, India, some countries in the Europe are exempted from $5,000 compensation for service performed in the US. It means that 5,000 can be excluded from your taxable income.
Dimov Tax Associates have clients over 40 countries and many of them are international students. We have been successfully filed their US tax return with tax treaty benefits. If you are interested or need help with filing taxes, please feel free to contact us at (833)829-1120 or hello@dimovtax.com
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K-1 Taxation
