Tax rules are complex and confusing even for US citizens! US Income Taxes Tax rules are complex and confusing even for US citizens!

Do I need to file income taxes? All F-1 & J-1 students are required to file tax forms each year in the U.S., regardless of whether or not they earned income. There are 2 types of taxes, Federal and State. April 15th of each year is the U.S. tax-filing deadline. Failure to file taxes by this date could result in a violation of your immigration status.

Are you taxed differently than a US citizen? International visitors are either classified as nonresident aliens or resident aliens for tax purposes This is determined by how long you have been in the US. Usually new students are nonresident aliens If you have previously been in the US for 3-5 tax years, for example if you attended high school in the US, then you will be considered a resident alien for taxes and will file similarly to US citizens.

What is being taxed? Taxes may be withheld from employment wages, taxable scholarships, and other types of payments. Students with an F-1 or J-1 visa are subject to withholding and payment of federal and state income taxes unless they are exempt by a provision of a tax treaty.

Treaty/Non Treaty The United States has tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. taxes on certain items of income. If there is no treaty between your country and the US, you must pay tax on the income. Some states in the US do not honor the provisions of tax treaties. So your Minnesota state taxes may be higher than your federal taxes.

Example of Tax Treaties by Country China – No limit on income nor time Netherlands – 3 years but no income limit Portugal – 5 years and $5,000

What happens when you file taxes? In reality, you’ve been paying taxes all year long. When you file taxes in April, all you are doing is determining if you paid the right amount. If you paid too much, you will get a refund If you paid too little, you must pay all remaining taxes. Students usually receive a small refund from federal taxes ($75-600) Student usually owe MN taxes ($40-400) We will help you file taxes.

Taxable Scholarships If you receive a scholarship from the College, a portion of that will be taxed. If your scholarship is more than tuition (includes room and board) then the additional amount is taxed by 14% $28,215 scholarship - $23,000 tuition = $5,215 $5,215 multiplied by 14% = $730.10 For the full year $1,460.20

How to pay for your scholarship tax? The College will withhold and pay your scholarship tax on your behalf. However you MUST pay back the college. Your student account will be charged $730.10 in October and in March. If you can’t pay in October or March, you can delay the tax amount being charged to your account, however it will be placed back in April and you will be expected to pay it then. If you don’t pay or still owe you will have a hold on your account and will be charged interest. Its best if you can delay only a small amount of the tax charge and make small payments during the year.

What happens after April 15th? If you will receive a Refund from the IRS (federal taxes) or from the state of Minnesota you can choose to receive a check or have the amount directly deposited into your bank account. The timing of the refund can be slow and unpredictable. J-1 students need to be mindful of refund payment method, as the refund might come after you have departed the US.

How to prepare for filing taxes? This Fall please keep receipts of your textbook and classroom supplies purchases. This will help decrease the amount of tax you owe. Photocopy and save all documents related to your finances. Today you started your Glacier account which will help us determine your NRA status and calculate your federal tax, but its not complete. On September 13th we will apply for Social Security Numbers. 2-4 weeks later your number will arrive on-campus. Once you have your SS card you will need to meet with Dave Brabec, so you can enter your SSN into your Glacier account. Then you will print and sign confirmations of your account and status. At various times during the year you will receive important tax related information and forms from Dave. Please respond to e-mails from Dave as quickly as you can. If you ever have questions you can always ask Dave, Emiko, or Megan.

How to prepare for filing taxes? In January you will receive tax information from the college and there will be continuing orientation where we will talk more about filing taxes. In February there will be help sessions during community time where you can work on your taxes using the Glacier software, and in March we will meet to file taxes together with the assistance of a local CPA. Start saving money now! We encourage all students to save money in case they owe taxes, so they will not be surprised come April 15th. In the past St. Olaf international students have paid anywhere from $750-$1,500 in taxes. The amount they owe depends on if their home country has a treaty, the type of scholarships they receive, number of on-campus hours worked, and any off-campus employment. Typically the amount owed increases each year. So by your senior year you will pay more than you did your freshman year.