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Kent Greer. Wake Forest University Center for Int’l Studies Winston-Salem, NC. FORMS YOU DO NOT NEED. FORM 1099 INT (interest income) FORM 1098T (tuition costs) You do not have to report your interest income and you are not entitled to any educational credits or adjustments.

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kent greer
Kent Greer

Wake Forest University

Center for Int’l Studies

Winston-Salem, NC

slide2

FORMS YOU DO NOT NEED

  • FORM 1099 INT (interest income)
  • FORM 1098T (tuition costs)
  • You do not have to report your interest income and you are not entitled to any educational credits or adjustments.
foreign student issues
FOREIGN STUDENT ISSUES
  • Filing Requirements
      • All F and J VISA holders must file a Form 8843.
      • All F and J VISA holders must file a Form 1040NR or a Form 1040NR-EZ when their U.S. source income is above $3,650.
filing status
FILING STATUS
  • Single individuals will file as single
  • Married non-resident’s must file as MFS unless he/she is married to a U.S. citizen and they elect to file as MFJ based on their world-wide income.
spousal exemption
SPOUSAL EXEMPTION

CANADA & MEXICO

  • Spouse can be claimed if the spouse had no U.S. gross income and is not claimed as a dependent on another U.S. return.
spousal exemption6
SPOUSAL EXEMPTION

SOUTH KOREA

  • Spouse can be claimed but must live or have lived with student in U.S. at some time during year
  • Must not have U.S. gross income
  • If the student has foreign and U.S. income the exemption must be prorated.
spousal exemption7
SPOUSAL EXEMPTION

INDIA

  • A student can claim an exemption for a spouse who has no U.S. gross income and cannot be claimed on someone else’s U.S. return.
  • The spouses information goes on line 7c.
dependency exemption
DEPENDENCY EXEMPTION
  • You cannot claim an exemption for your dependents unless your from one of the following countries:
slide9

DEPENDENCYEXEMPTION cont’d

  • Canada and Mexico*
  • S. Korea – The dependent must live with the non-resident for part of the tax year. If the non-resident has U.S. and foreign income the exemption must be prorated.
  • India – Dependent child can be claimed if born in the U.S.
who can use a form1040nr ez
WHO CAN USE A FORM1040NR-EZ?
  • No exemptions/dependents claimed
  • Cannot be claimed as a dependent on a U.S. tax return
  • The only income is from wages, state tax refunds and scholarships or fellowship grants.
1040nr ez cont d
1040NR-EZ cont’d
  • Taxable income is under $100,000
  • The only adjustments to income are student loan interest or scholarship exclusion.
  • No tax credits are claimed.
1040nr ez cont d12
1040NR-EZ cont’d
  • No exemption is claimed for spouse
  • The only itemized deduction is state and local taxes
  • The only taxes owed are income taxes
u s source income includes
U.S. SOURCE INCOME INCLUDES
  • Wages

(Code 19 Form 1042-S or Box 1 Form W-2)

  • Wages for Teachers and Researchers

(Code 18 Form 1042-S)

  • Scholarships, Fellowships & Grants that exceed tuition, fees, books and required supplies and equipment

(Code 15 Form 1042-S)

wage income
WAGE INCOME
  • Add up all Form W-2, Box 1’s, plus all Form 1042-S, Box 2’s.
  • See Table 4 Countries With Tax Treaty Benefits for Student Wages.

(last page of handout)

  • Reduce the total by the amount shown for your country.
wage income cont d
WAGE INCOME cont’d
  • Report that $ amount shown for your country on line 6 Form 1040NR-EZ, or line 22 Form 1040NR
  • Show the net amount on line 3 Form 1040NR-EZ, or line 8 Form 1040NR
state tax refund
STATE TAX REFUND
  • If you filed a state tax return in 2009 and received a refund report your refund on Form 1040NR-EZ line 4.
  • Report it on Form 1040NR line 11.
scholarship income
SCHOLARSHIP INCOME
  • See Table 2 Countries with Treaty Benefits for Scholarship Income: (page 2 of handout)
scholarship income cont d
SCHOLARSHIP INCOME cont’d
  • If you are from one of the countries listed enter Zero (-0-) Form 1040NR-EZ on line 5 and the Code 15 amount on line 6.
  • If filing Form 1040NR enter Zero on line 12 and the code 15 amount on line 22.
adjustments to income
ADJUSTMENTS TO INCOME
  • Student Loan Interest – may be reported to you on a Form 1098-E. Report it on line 9 Form 1040NR-EZ or line 32 Form 1040NR.
deductions
DEDUCTIONS
  • State and Local Taxes (Box 17 & 19 Form W-2). Add them up and report them on Form 1040NR-EZ line 11
  • If using 1040NR report them on page 3 line 1 or 2.
  • Contributions to U.S. charities can only be shown on Form 1040NR line 4 or 5.
personal exemption
PERSONAL EXEMPTION
  • Everyone can claim a personal exemption for his/her self unless they can be claimed as a dependent on someone else’s U. S. tax return.
  • Put $3,650 on Form 1040 NR-EZ line 13. Form 1040NR line 39.
income tax table
INCOME TAX TABLE
  • If line 14 Form 1040NR-EZ or line 40 Form 1040NR is > then 0. Look up the amount on that line in the instruction booklet.
  • The tax tables start on Page 17of 1040NR-EZ and Page 45 of 1040NR. Place the amount found on line 15 NR-EZ or line 41 of NR.
child tax credit
CHILD TAX CREDIT
  • If you can claim as dependent and is qualifying child who was born in the U.S. and was under the age of 17 at the end of the tax year, can claim credit; complete Form 8901 and enter the amount on line 48 of Form 1040NR.
  • If line 41 is < $1,000 and your wages are > $3,000 you will need to complete a Form 8812 and enter that amount on line 61, 1040NR.
refund or balance due
REFUND or BALANCE DUE
  • Take all Box 2’s of Form W-2 add them up and enter that amount on line 18a of NR-EZ or line 60a of NR.
  • On EZ compare line 17 and 21
  • On NR compare line 59 and 68
refund and balance cont d
REFUND and BALANCE cont’d

Refund of Taxes Paid

  • If 21 is more than line 17, subtract 17 from 21 and put difference on EZ lines 22 & 23a; for NR, if line 68 is more than line 59, subtract 59 from 68 and put amount on lines 69 & 70a. You are due a refund.

Owe Taxes

  • If line 17 is more than 21, subtract 21 from 17 and put amount on line 25. For NR, if line 59 is more than 68, subtract line 68 from 59 and put amount on line 72.
unusual treaty provisions
UNUSUAL TREATY PROVISIONS

CHINA

  • Students are entitled to the $5,000 wage exemption for the time necessary to complete their education. They would still be entitled to the exemption after 5 years.
unusual treaty provisions27
UNUSUAL TREATY PROVISIONS

CANADA

  • Exempts all earned income up to $10,000.
  • Once that amount is exceeded all the income is taxable.
form 8843
FORM 8843
  • Must be filed whether or not the student has any U.S. income. If it is not filed the IRS could tax the individual on their worldwide income.
  • Students must complete Part 1 and 3.
form 8843 top portion
FORM 8843 top portion
  • List the family name and personal name in the correct space.
  • The taxpayer space needs to be filled in with the Soc. Sec. No. or an ITIN, if no number leave this space blank.
  • The address section is only completed if this form is filed by itself.
form 8843 part 1
FORM 8843 Part 1
  • Ques. 1a & b are asking for the immigration status that the individual is in. Generally, the control number is the VISA number.
  • Ques. 2 If > one country, what country is the person closer to.
  • Ques. 3 self-explanatory
  • Ques. 4a & b are the same number.
form 8843 part 3
FORM 8843 Part 3
  • Ques. 9 name and address of school.
  • Ques. 10 name, address & phone # of someone at school the IRS can contact to determine you are enrolled there.
  • Ques. 11 - 14 self-explanatory
social security taxes
SOCIAL SECURITY TAXES
  • Wages paid to students which are related to their purpose here in U.S. are not subject to Soc. Sec. or Medicare taxes.
  • If these taxes were withheld in error the student should contact the payer and ask for a refund.
  • File Form 843 with Form 8316 if the payer refuses.