Tax Workshop for International Students & Scholars, 2023 Tax Returns

Alvera King, an account manager at Sprintx, welcomes attendees to a webinar on non-resident tax, joined by colleague Neil Duffy. The session aims to explain non-resident tax principles and filing obligations. Alvera outlines the structure of the webinar, including housekeeping notes, an invitation for questions, and a reminder that the presentation is for informational purposes. A disclaimer is provided about the unique nature of individual tax positions.

The tax year for 2023 aligns with the calendar year, focusing on income earned and taxes withheld from January 1st to December 31st. The filing deadline is April 15, 2024. Residency for tax purposes is independent of visa or immigration status and is determined by the number of days spent in the US. F1 and J1 visa holders are generally considered non-resident for tax purposes for the first five years, after which the substantial presence test applies. Sprintx tax software assists with this calculation.

All non-residents must file Form 8843, regardless of income earned. Form 8843, also known as a statement for exempt individuals, declares non-resident status for tax purposes. Non-residents with taxable income may have additional filing requirements. Common types of taxable income include employment wages, taxable scholarships, grants, investment income, and cryptocurrency. Less common taxable situations like gambling winnings, focus group payments, and rental income from platforms like Airbnb are also discussed.

Certain types of income do not trigger a filing requirement for non-residents, such as scholarships for tuition, scholarships from outside the US, and income earned overseas. The IRS is only concerned with US source income. Common income documents that may be received include Form W2 for wages, Form 1042s for certain scholarships and royalties, and the 1099 series for miscellaneous income. It is crucial to wait for all expected income documents before preparing taxes.

FICA taxes are generally not applicable to non-resident students on F1 or J1 visas, but if withheld in error, a refund can be claimed. The tax status of a spouse or dependent is also significant, with non-working spouses needing to complete Form 8843 and working spouses facing federal and possibly state filing requirements. Non-residents cannot file a joint return with their spouse. The Individual Taxpayer Identification Number (ITIN) is necessary for those without a Social Security number who have taxable income or need to file a federal tax return.

Non-residents should not use resident tax preparation services like TurboTax, as these do not cater to non-resident tax returns. Sprintax ensures that tax returns are prepared correctly for non-residents. The process of using Sprintax involves receiving an email with a link and access code from the educational institution, logging in or creating an account, and proceeding through a questionnaire that determines tax residency status and filing requirements.

State tax requirements may apply in addition to federal requirements and vary based on factors like visa type and days spent in the state. Sprintax assists with determining state filing obligations. The application process for an ITIN involves Form W7 and can be done in advance or alongside the federal tax return. Documentation certification processes differ based on the timing of the ITIN application.

Non-residents may receive Form 1098-T from their educational institution, but this form is only applicable to residents and should not be claimed by non-residents to avoid penalties. The timeline for federal and state tax refunds is discussed, with an average of six weeks or more for processing. The importance of reporting cryptocurrency transactions and the potential implications of misfiling taxes, including impact on immigration status and financial penalties, are highlighted.

The process for using Sprintax to prepare taxes includes entering personal information, answering questions about residency, income, and state tax requirements, and receiving guidance on tax treaty benefits and deductions. Sprintax provides support through live chat, educational videos, a blog, and tax workshops. The session concludes with an invitation to ask questions and clarification on various tax-related topics, emphasizing the importance of compliance with tax obligations.