Q: How does the income tax system work in the U.S.?
In the U.S., the tax year runs from January 1 to December 31 of any given year. Employers are required to take money out of your paycheck for taxes during that year. This process is called “withholding” money for taxes. That tax money is paid to the U.S. federal tax department which is called the Internal Revenue Service (IRS). OIT payroll office (or another U.S. employer) determines the amount to be “withheld” out of your paycheck based upon U.S. tax treaties with your country and IRS regulations. In January through March of every year, employers and universities report wages, scholarships, and tax withheld to the IRS during the previous year and send statements to individuals by March 15th every year. Individuals then determine what the correct amount of tax liability should be through a form call a “tax return form.” The tax return form is due on April 15th every year. That return covers the previous year’s income.
Q: What is a tax return?
A “tax return” is a form you fill out and send in (either by mail or electronically) to the U.S. Internal Revenue Service. The form is both for paying taxes that you may owe and also for getting back money that has been taken out of your paycheck.
Q: How do I know if I need to file a U.S. federal tax return?
All international students and scholars and their dependents are required to file at least one tax form with the U.S. Internal Revenue Service (IRS) – the 8843.
Q: What if I didn’t earn any income?
Even if you did not earn any income in the U.S., you are required to complete an 8843, recording your presence in the U.S.
Q: What is the deadline to file?
Every year, the deadline is April 15th (or the next business day after the 15th).
Q: What kinds of income are taxable?
The following types of income are taxable:
- Scholarship, fellowship or grant from a U.S. source that exceeded the amount of tuition and mandatory fees.
- Wages from any U.S. job, on-campus or off-campus, including teaching or research assistantship.
- Consulting fees for work done in the U.S.
- Dividends and/or capital gains from ownership of U.S. mutual funds or individual stocks or bonds.
- Any other income (such as rent, royalties, copyright earnings) from U.S. sources EXCEPT for interest earned on a savings account or certificate of deposit in a U.S. bank.
Q: What are the W-2 and 1042-S forms?
Employers and universities are required to report wages, scholarships, and tax money withheld from your paycheck to the IRS. The employers send statements to individuals by March 15th every year. There are many types of these statements, but the most common ones for international students and academic staff are these two forms:
- W-2: Wage and Tax Statement and/or
- 1042-S: Foreign Person’s US Source Income Subject to Withholding
Q: What is a W-2 form?
The W-2 form reports your wages you earned and any taxes the employer has withheld from your paycheck for federal or state taxes. If you earned income in the U.S., a W-2 should be sent to you by mid-February every year.
Q: What if I didn’t get a W-2 form?
If you did not earn wages in the U.S. in the tax year, then you will not be receiving a W-2. If you did earn wages and you have not received one, contact the employer. It is possible that they do not have the correct mailing address for you. If your employer is OIT, contact the OIT Payroll Office at 541.885.1210.
Q: What is a 1042S form?
A 1042-S reports scholarships, fellowships, grants, awards and any other payment made to you for which you did not work (i.e. NOT wages). It also reports earned income (wages) which are exempt from tax because of a tax treaty between your country of citizenship and the U.S. If you received these types of income, you are supposed to receive this form from the payers by March 15th every year. If you are not sure if you will be receiving a 1042-S form, you can contact the OIT Payroll Office at 541.885.1210.
Q: What if I didn’t get a 1042-S form?
If you did not receive the types of income listed above in the tax year, then you will not be receiving a 1042-S. If you are not sure, contact the OIT Payroll Office at 541.885.1210 or appropriate employer. If you think you should have received one only for the tax treaty benefits, you can still claim the benefit of the tax treaty without having the 1042-S form.
Q: I have heard that my country has a tax treaty with the U.S., how do I get the benefit of that treaty?
Wages you earn in the U.S. that are exempt from tax due to a tax treaty should be reported to you on a 1042-S form.
Q: What is a 1098-T form?
All students have 1098T information generated for them. IF they do not have a SSN in the system then your OIT ID# will be printed on the 1098-T. Students are notified by the OIT Business Office that they are available on their web-for-student account to view and print.
Internationals filing taxes as Non-Residents should IGNORE the 1098-T form. This form is a tax document that reports to the student (and the IRS) tuition charges and financial aid for a calendar year. For more information, visit http://www.irs.gov/instructions/i1098et/ar02.html
Q: I don’t have a U.S. social security number. Do I need one to file tax forms?
If you did NOT receive any payments and you only need to fill out the 8843 form, you will not need any type of tax identification number.
Q: I thought I did not have to pay social security and medicare, but my employer has taken out social security and medicare from my paycheck. What should I do?