Spring is close and tax season is too.
Each year, usually by Apr. 15, United States residents are required to file taxes.
With the help of Lindenwood’s Human Resources Payroll Director Monica Seiter, we have gathered a list of things you should consider before and during your tax process.
“For international students, filing tax documents each year is an important part of maintaining your immigration status and is a federal requirement for international visitors and their dependents,” Seiter said. “Not filing your required taxes could lead to penalties, such as fines, or even negatively impact your immigration status.”
Not only domestic students are required to file taxes, but International students too, regardless of whether they earn income in the U.S. or not.
Who must pay taxes?
- Everyone must file a federal tax return if they make over a certain amount of income.
- All international students are required to file a tax return, regardless of whether or not they receive income.
All tax returns must be submitted to the IRS and appropriate state and local tax offices by the tax due date. For 2024 this is Monday, Apr. 15.
(Many states and even some local jurisdictions also require income tax filing either where you live and/or where you perform work.)
What do you need to know to file your taxes?
- Earned income: This includes salaries, wages, tips, professional fees, and other amounts received as pay for work performed.
- Unearned income: This is investment-type income and includes interest, dividends and capital gains, rents, royalties, etc.
Filing Taxes as an International Student
As an international student, you may need to use a Social Security Number (SSN) to file taxes.
You must apply for it with the Social Security Administration if you worked in the U.S. and received taxable employment compensation. If you are not eligible for an SSN, you must apply for an individual taxpayer identification number (ITIN) from the Internal Revenue Service (IRS) to use on forms.
Important Terms to Know:
- Form 1040: the basic income-reporting form that almost everyone uses. You might have to complete multiple add-ons called schedules.
- Form 1040NR or 1040NR-EZ: standard tax filing forms for nonresident aliens with taxable income.
- Form 8843: informational statement required by the U.S. government for all nonresident aliens who entered the U.S. with visa types F, J, M, and Q, including any dependents. You must file this form whether or not you received income.
- Form 1098-T: This form tells the IRS how much you paid in tuition and fees.
- Form W-2: statement issued by an employer to report all taxable income and any taxes withheld.
- 1042-S: This form is like the W-2 for international students. Your employer will give you this form to report the income you earned. You may also receive this form if you receive taxable scholarships.
The IRS has five filing status options for taxpayers required to file income taxes. This status determines your standard deduction, your tax rate and the credits you are eligible for, and their phase-out ranges. All this is important because it affects how much you will pay and get back in the form of a refund.
You can file as:
- Single
-
Married, filing jointly
- Married, filing separately
- Head of household
- Qualifying surviving spouse
One of the first things you’ll have to determine is whether you are being claimed as a dependent. You’ll have to speak with your parents or guardians to find out if anyone is claiming you as a dependent on a U.S. tax return. If they are, it affects some of the credits and/or deductions that you may claim on your return.
Generally, a parent can claim you as a dependent until age 19, but if you are a full-time student, they can claim you as a dependent until age 24. There are other determinants, including how much support you provide for yourself, or your parents provide for you. If your parents do qualify to claim you as a dependent, the IRS considers you a dependent whether your parents claim you or not. Even if a parent or guardian claims you as a dependent, you will still have to file a return if your gross income is over the annual threshold.
Tax Breaks for College Students
One advantage of filing taxes as a student is that you may qualify for education credits or deductions. Two types of tax credits exist for college students or people who claim students as dependents.
The American Opportunity Tax Credit
To qualify:
- You must be in your first four years of higher education.
- You must be enrolled in a degree, certificate, or another postsecondary program at least half-time.
- The filer’s Modified Adjusted Gross Income (MAGI) must be $80,000 or less.
AOTC offers a credit back for certain education expenses, such as tuition, up to $2,500. In addition, this credit is refundable. That means if the credit covers more than the amount of taxes you owe, you can get some of the remaining credit refunded to you.
The Lifetime Learning Credit
If you don’t qualify for the AOTC, you may still be eligible for the LLC. The LLC is for part-time or full-time students enrolled in a degree, credential, or job-skills training program. Plus, you can use it even if you’ve already completed four years of higher education.
The LLC may provide up to $2,000 in credit. Unlike the AOTC, it is not refundable. To see if you qualify for either student tax credit, make sure you complete form 8863.
If this all sounds extremely complicated, that’s because it is. We suggest contacting a professional tax advisor if you have questions.
The University partners with Sprintax to provide international students with resources to file their taxes. Contact the international student office for assistance with Sprintax: [email protected]
Here is a fun fact about taxes according to “turbotax.com”:
“Federal tax code is more than 70,000 pages long, growing from 400 pages at its birth in 1913. That’s enough sheets to wallpaper the outside of the Washington Monument.”
