International Students and Taxes Tax Year 2005 International Student Services Tidewater Community College Spring 2006

IMPORTANT: PLEASE READ The following information is only a guide and was not prepared by a tax professional. Neither Tidewater Community College and/or the staff of International Student Services is liable for issues related to your taxes. Remember—satisfying U.S. tax requirements is solely your responsibility. Links to additional resources of information are located at the end of this presentation. For specific tax information, please contact a tax professional.

Basics of the U.S. Tax System The U.S. income tax system is based upon collection of anticipated taxes during the year and the annual filing of a statement of income and exemptions. The federal government and state government are separate taxing entities with separate filing requirements. The penalties for knowingly filing a false tax return are severe.

Basics of the U.S. Tax System A “tax” return is filed each year with the Internal Revenue Service (IRS) to determine the taxes owed on income the prior year. (Although we are now in 2006, you will file tax returns based on income in 2005) “Exemptions” and “Deductions” are subtractions for income and are used to determine the final tax bill. Exemption: an amount of income each taxpayer may take before any taxes are due. Deduction: a payment or contribution that can be deducted from income before taxes are determined.

Determine Your Federal Tax Residence Status For the first 5 calendar years that you are in the U.S. as an F-1 student, you do not count the days present towards tax residence so you will be a non-resident for tax purposes. If you entered the U.S. as a student before January 1, 2000, you may be a resident for tax purposes and need to follow the IRS resident/nonresident determination instructions. For this evaluation, go to the IRS website listed below:

Federal Tax Forms for Nonresidents If you had any earnings in 2005, you must complete: 1040NR or 1040NR-EZ Most students can use the EZ. –Can’t claim dependents on the EZ. –If you have any income other than work or scholarships, you can’t use the EZ. –Can’t claim deductions except for state income tax paid Statement that you are an “exempt individual.” IF YOU HAD NO EARNINGS IN 2005, YOU ONLY COMPLETE THE FORM 8843.

If You Have Worked... Obtain copies of all appropriate federal and state tax forms. Have W-2 forms from all employers you worked for in Have 1042-S forms from any employer that reduced withholding due to a tax treaty or taxable scholarship benefits, if applicable. Complete the appropriate 1040 form and form 8843.

Steps for Completing All Tax Forms READ the instructions. FOLLOW the instructions.

FORM 8843 If you have not worked in 2005, only complete form article/0,,id=96349,00.html article/0,,id=96349,00.html If you do not have a social security number, leave that section at the top of the form blank. Do not use your TCC student number or EMPL ID! Complete Part I and Part III and sign.

Filing your Federal Tax Forms Forms must be postmarked by: April 15 if you have earned income. June 15 if you have NO income. Send forms to: Internal Revenue Service Center, Philadelphia, PA

Virginia Income Tax If you had no earned income in 2005, you do NOT need to file any type of Virginia tax return. If you have earned income and lived in Virginia all of 2005, you file a resident form. If you have earned income and lived in Virginia for part of 2005, you file a part-year resident form.

Virginia Income Tax Filing Deadline Virginia tax returns must be filed by May 1 st. The filing address is given in the tax instructions on the Virginia tax forms.

Other Concerns As a nonresident, you are not eligible for any tuition tax credits. Any decisions on whether to claim tax treaty benefits on your tax return is up to you. If you believe that Social Security taxes were incorrectly withheld and you cannot get a refund from your employer, use form 843 to claim a refund from the IRS.

REMEMBER... Not filing tax forms can create future immigration problems. If you forget to file on time, send the form in anyway. The sooner you file, the less you might be penalized.

For More Help... Federal Tax info: Virginia tax info: For additional tax information, contact a tax professional. The International Student Services office cannot answer specific tax questions.