Transcript Basic U.S. Tax Information for Foreign Nationals

WFMO INTERNATIONAL TAX OFFICE
Basic U.S. Tax Information for
Nonresident Alien for tax purpose
The materials contained in this presentation are for general information purpose only, they do not constitute legal or
professional advice on your specific tax situation. Distribution, republication, and/or retransmission of material contained
are prohibited without written permission of the International Tax Office.
Tax Systems in the U.S.
U.S. Person Tax System
 U.S. Citizen
 Lawful Permanent Resident (LPR)
 Resident Alien for tax purpose (RA)
Nonresident Alien Tax System
 Nonresident Alien for tax purpose (NRA)
U.S. Residency Determination


Green card test – Resident Alien for tax purpose if met,
or
Substantial Presence test
At least 31 days in the current calendar year
 183 days during the preceding 3-year period:

All the days present in the current calendar year
 1/3 of days present during the 1st preceding calendar year
 1/6 of days present during 2nd preceding calendar year



If met, your residency status will be a Resident Alien for tax purpose.
If not met, your residency status will be a Nonresident Alien for tax
purpose.
U.S. Residency Determination (cont’d)

Exceptions
F
and J students: 5 exempt calendar years
 Other J visa holders: 2 exempt calendar years
Note: The term “Exempt” above means that the
individual is exempt from counting days toward the
calculation of the substantial presence test.
U.S. Taxable Income


Services required: Compensation, Wages, or Salary
No service required:

Fellowships

Nonqualified Scholarships:



Room and Board Scholarships

Scholarship exceed tuition and mandatory course related fees

Health Insurance Subsidy or “Reimbursement”

Other
Prize/Awards
Travel “Reimbursement” for non official Tulane business or
not covered under the IRS “accountable plan”
Taxes


Social Security tax – 6.2%
Medicare tax - 1.45%
The first two are commonly known as FICA.
Exempt: 1) for nonresident alien for tax purpose, or 2) students (RA) who met
certain requirements

Federal income tax – NRA can claim Single and 1 exemption at
maximum (regardless of your marital status or # of dependents)

State income tax
Tax Treaty




68 countries have a tax treaty agreements with the U.S.
Has dollar limit and a time limit
For certain types of incomes
Not automatically granted, must meet all requirements



Must have a social security number (SSN) or Individual Taxpayer
Identification Number (ITIN)
Must complete and submit all applicable exemption forms, each
year (e.g. Form 8233, Form W8-BEN)
Apply to Federal and state income tax only
Tax Withholding


Employer (payer) is required to withhold tax from all
payments (including nonqualified fellowships and
scholarships) to nonresident aliens for tax purpose
Employer (payer) will then pay (deposit) that tax to the
government on your behalf
Annual Tax Statements
Employer (Payer) will issue an annual tax statement to summarize
all the payments (earnings) and taxes withheld for each calendar
(tax) year to employees (payees) in the beginning of the following
year.
There are several types of the annual tax statements based on the
type of payments (earnings) or based on whether tax treaty
benefits were used during the tax year.
Annual Tax Statements (cont’d)
Types of annual tax statements may include:

W-2 (Wage and Tax Statement)
 Compensation not covered by tax treaty




No treaty or did not claim treaty
Exceed time and dollar limits
Available https://w2.adp.com by Jan 31
The individual who signs up to receive an electronic form W2 will be notified via email from w2.adp.com of its
availability.
Sample W-2
Annual Tax Statements (cont’d)

1042-S (Foreign Person’s U.S. Source Income Subject to
Withholding)
 Compensation covered by a tax treaty (up to dollar limit)
 Non-Qualified Scholarships
 Non-Qualified Fellowships
 Prize/Awards
 Independent personal services, royalty, other income
 Available www.online-tax.net by March 15.
 An individual who receives a form 1042s will be notified of
its availability via email from [email protected]
Sample 1042-S
Annual Tax Statements (cont’d)

1098-T (Tuition Statement)


Provide to all eligible students who pay tuition and enrollment
fees during the calendar year.
If receive, just keep on file for your record, do not file with your
tax return
Sample 1098-T
Annual Tax Statements (cont’d)

Form 1099-MISC/1099-INT/1099-DIV/1099-G

The NRA should not receive form 1099-MISC from Tulane. If
receives, contact ITO
Annual Tax Statements (cont’d)
Note:
If you do not have the form that your friend has, because you may
have different situations:
 Tax Residency Status
 Income Type and Amount
 Tax Treaty Eligibility
U.S. Federal Tax Return
Nonresident Alien
Resident Alien
U.S. Source Income
Worldwide income
Form 1040NR, or Form 1040NR-EZ
Form 8843 (For F and J only; even if no
income)
Form 1040, or Form 1040A, or Form 1040EZ
No standard deduction
Limited itemized deduction
Eligible to claim standard deduction
More itemized deductions
May claim only one personal exemption
May claim the exemptions in the same
manner as U.S. citizen
Cannot file “Joint” tax return
Can file “Joint” tax return
Must mail tax return to IRS
(No electronic filing)
Can file electronically
 Dual-Status
http://www.irs.gov/Individuals/International-Taxpayers/Taxation-of-Dual-Status-Aliens
U.S. Tax Return – Nonresident Alien
Mailing Address varies depends on the individual’s tax situation
 Deadline




April 15
June 15 (if you file Form 8843 only)
Recommend: Use GLACIER Tax Prep (GTP) to prepare tax
returns



Free of charge
GTP will determine the proper form (1040NR vs 1040NR-EZ) for
you to file based on your entry
GTP will provide you with the instruction as to


What address to mail
When is the deadline to file
Louisiana State Tax Return
Deadline: May 15
 http://revenue.louisiana.gov/Individuals

ITO Contact Information


Located at Uptown Square, 200 Broadway Street,
Suite 122, New Orleans, LA 70118
Email: [email protected]