2012
Tax Bulletin
(Information about completing
and submitting
tax
forms for calendar year 2011)
It is
tax filing season again and we are sure that many
of you are questioning whether you must file tax forms,
how to complete the forms and much more. This update has been
designed to provide students and scholars with basic information
and resources about your tax filing obligations, how to complete
and submit the correct tax forms on time and how to pay the proper
tax or, better yet, receive a tax refund.
All
international scholars and students in F-1 or J-1 status
as well as dependents in F-2 and J-2 status who were
physically present in the U.S. any time between January
1, 2011 and
December 31,
2011 must complete
and submit some type of 2011 federal tax form. International
students and scholars in other immigration classifications may also
be required to complete and submit tax forms. The number and type
of form you must complete depend on whether you earned income during
2011, the type of income you received, the length of time you have
been physically present in the U.S.
and other factors.
Taxes
are often complicated, even for those native to the United States.
There are many different kinds of taxes in the U.S. and different
agencies are responsible for collecting these taxes. Please be advised that the staff of the International Students &
Scholars Office does not specialize in international tax law and
can not answer specific questions regarding your individual tax
filing requirement; however, we have prepared the following information
to help get you started.
In
order to facilitate the filing of tax forms, the ISSO has again
purchased a web-based tax return preparation system that is designed
exclusively for international students, scholars and their dependents. The Windstar Foreign National Tax Resource (FNTR) is an online
tax preparation software that will help you understand your nonresident
alien tax obligations and to complete many of the forms including federal 1040NR or 1040NR-EZ
forms and the Massachusetts State Form1NR/PY
(if required depending on your individual tax status and income
earned). The product will also offer you an extensive online
searchable, content library to give you general information about
U.S. tax withholdings, tax filing obligations, tax treaties and
detailed information if you are required to file a tax return as
a dual status filer or resident for tax purposes. An overview
of Windstar FNTR can be found at: http://www.windstar.com/public/prodsfntr.html
What
is a Tax Return?
In
the U.S., federal and state income taxes are prepaid by each employer
based on the "estimate" of tax liability indicated at the start
of employment by the employee on the Form W-4. Since the withholding
is only an estimate, employees are given an annual opportunity to
reconcile the amount of tax withheld with how much was owed. The
name of the form on which the reconciliation is made is called the
"Tax Return". The federal tax return must be completed and submitted
to the Internal Revenue Service (IRS). State tax returns must be
submitted to the Massachusetts Department of Revenue (DOR) and/or
to the state agency in any other U.S. state where you have received
income in 2011. In some cases, filing the tax return results in
a refund because the tax withholding was higher than necessary.
However, sometimes a taxpayer does not have enough tax withheld
throughout the year so you may need to send a payment to the IRS
with your tax return. Occasionally, the total taxes withheld match
the amount due, so no money is due by either the taxpayer or the
IRS.
Must
I file a federal tax return AND a state tax return?
The
federal government imposes income tax obligations on all individuals
who earn income in the U.S. In addition, most state governments
impose income tax obligations on individuals who reside and/or work
in their states. Therefore, in most cases, individuals must
file a federal tax form submitted the U.S. Internal Revenue Serivce
plus a second tax form submitted to the tax office of the state
in which they reside. If you worked in a state other than
the state in which you reside, you may be required to submit an
additional tax form tax office of that state.
When
must I complete and submit my tax return?
If
you have earned income in 2011, all federal and state tax forms
must be postmarked by April 17, 2012.
If
you have not earned income in 2011 or you are filing from outside
the U.S., your forms must be postmarked by June 15, 2012.
Who
Must File a Tax Return?
All
F-1 and J-1 students and scholars and their F-2 and J-2 dependents
are required to complete and submit at least one tax form. In addition, anyone who has earned income while in the U.S. must
file a tax return. Taxpayers are divided into three general categories
for tax purposes, regardless of income: residents, nonresidents,
and dual status aliens.
How
do I determine my tax residence category?
It
is important not to confuse immigration terms of "resident"
and "nonresident" with taxpayer categories that have the
same name. Residence for tax purposes is defined based on the Substantial
Presence Test (SPT) which is independent from your immigration classification.
The SPT is the calculation that the federal government uses to determine
when nonresident aliens for immigration purposes have been in the
United States long enough to be considered residents for tax purposes.
The Foreign National Tax Resource (Windstar FNTR) system,
a web-based tax return preparation system designed exclusively for
international students, scholars and their dependents, should help
you determine your tax residence status.
Nonresidents (for tax purposes)
are taxed only on their U.S. income and usually complete
Forms 1040NR or 1040NR-EZ. While nonresidents are not required
to file a federal or state tax return if their earned income amount
is below the stated personal exemption amount, they are encouraged
to file a return if taxes were withheld from their pay check as
they will likely receive a refund.
In
addition, all individuals in F-1 and J-1 immigration
status (including F-2 and J-2 dependents) filing as nonresidents
for tax purposes are required to file a Form 8843 - Statement
for Exempt Individuals. Filing this form does not mean you are
exempt from taxes, but rather that you are exempt from counting
days of physical presence in the U.S. to determine if you are
to be taxed as a resident or a nonresident. Keep in mind that
even if you have not earned any income, you are still required
to complete and submit the Form 8843. This form requires information
about immigration status and tax treaty claims. For additional
information regarding completing Form 8843, please consult the Windstar FNTR content
library.
During
the time individuals in F-1 and J-1 immigration status are "exempt
individuals," they will remain nonresidents for tax purposes even
though they are present in the United States for 183 days or more.
Once they exceed "exempt individual" status, days of physical
presence will be counted and they may become residents for tax
purposes.
If you qualify to file as a nonresident, it is likely that Windstar FNTR will
be able to help you prepare all of your tax forms.
Residents (for tax purposes)
are taxed by the U.S. on their worldwide income and generally complete the Form 1040-EZ
or the 1040 and required schedule forms. Some examples of a resident
for tax purposes are:
- F and J students (and their dependents) who no longer qualify
as "exempt individuals" as they have been physically present in
the U.S.
over five tax years
- J scholars (and their dependents) who no longer qualify as "exempt
individuals" as they have been physically present in the U.S.
for more than two out of every
six tax years
- foreign nationals in any other immigration classification who
are physically present in the U.S. for 183 days or more in any
three year period.
While Windstar FNTR will be able to offer you detailed
information about your tax status and filing obligations as a
resident for tax purposes in their content library, Windstar
FNTR will likely not be able to assist you in preparing your
actual tax forms.
Dual
Status Aliens are nonresidents for tax purposes for
part of the year and residents for tax purposes for the rest of
the year.
A
change in immigration status may affect an individual's resident
status changing them from a nonresident (for tax purposes) to
a resident (for tax purposes).
While Windstar FNTR will be able to offer you detailed information
about your tax status and filing obligations as a dual status
alien in their content library, Windstar FNTR will likely
not be able to assist you in preparing your actual tax forms.
What
documentation do I need to collect before I begin?
If you
earned or received income in the U.S., you
are required to gather official documentation from various
sources in order to complete the tax forms. Sources of
U.S.
income may include on-campus employment, scholarships, fellowships,
graduate assistantships, stipends, practical or academic training,
and any compensation received for labor. "Income" is not limited
to wages paid to the individual in cash, but also includes that
portion of a scholarship, fellowship, or assistantship that is applied
to housing and meal expenses. Some examples of this official
documentation are a Form W-2 from your employer, Form
1042-S from Boston University
and/or another academic institution
you attended in 2011, Form 1099 from your bank or any
other forms showing income.
Form W-2
Students
and scholars who received taxable income during 2011 from Boston
University should have already received a Form W-2
which shows the wages you earned and taxes Boston University
withheld. The W-2 forms were mailed by the Office of Payroll
on January 31, 2012. If you have any questions regarding your Form W-2,
please contact the Boston
University Office of Payroll directly at 617-353-2270.
Form
1042-S
Students
who received a scholarship or fellowship from Boston University
or students who are claiming a tax treaty in 2011 will receive in mid March a Form 1042-S from the BU Payroll Office which shows
the amounts paid to foreign students, trainees, teachers
and researchers. In addition, students who have claimed a
tax treaty exemption for their wages or stipends should have
recieved a Form 1042-S which shows the federal wages covered by
the tax treaty. You will not be able to begin completing your tax forms until after
you have received the form. If you have any questions regarding
your Form 1042-S, please contact the Boston
University Office of Payroll directly.
How
do I get started on completing my tax return?
In
order to facilitate the filing of your federal tax returns, the
ISSO has purchased licenses to Windstar's Foreign National Tax Resource
(Windstar FNTR), an online system for completing tax forms.
Please note that the Windstar FNTR access code you will
need to create your individual Windstar FNTR login will
be sent to you in a private email from the ISSO. Please contact
the ISSO (isso@bu.edu) if you do
not receive the instructional email.
Windstar
FNTR will assist most international students and scholars with
the preparation of their tax forms. However, there may be
circumstances in which individuals will not be able to use Windstar
FNTR. Consulting the information on the Windstar
FNTR site and entering basic information into the system will
help determine if you are eligible to use Windstar FNTR.
Please note that if you are required to submit a State of Massachusetts tax
return, Windstar FNTR will help you prepare the appropriate forms for submission.
Can
I hire someone to prepare my tax forms for me?
Absolutely!
Students and scholars who have more complicated tax cases or simply
want assistance in completing their tax forms can pay a tax service
provider or a tax consultant.
Tax
service providers
There are many tax service providers who market to individuals who
need help completing their tax forms. If you decide to use
a tax provider to help complete your forms, make sure to ask if
they have foreign national tax expertise. If they do not,
then you should find another provider. Also, make sure to
ask if they will give you a discount as a student or scholar of
Boston University.
H&R Block, a tax service specialist, is offering Boston University
clients a special $20 discount in the completion of their state
and federal tax forms. Nonresident Tax
Specialists are available to assist you at the location listed below. In order to take advantage of the $20 discount, you must
show your Boston University ID and mention the promotional code BU2012:
H&R
Block
535 Commonwealth
Avenue
Kenmore
Square
Boston,
MA 02215
Telephone:
(617) 536-2048
|
Tax
consultants and tax attorneys
You also have the option of hiring a lawyer to assist you in reporting
your taxes and to file your forms. A listing can be found in a phone
directory or at http://www.superpages.com under a category such as "tax returns, consultants, & representatives."
If you choose to hire a private agency or lawyer, we strongly recommend
that you make certain they specialize in tax issues unique to foreign
nationals.
CINTAX
Tax Preparation Software
If you have used the CINTAX tax preparation software
provided by the ISSO in past years for nonresident tax forms and
prefer to continue using this product, you can purchase an individual
license for $39 at https://www.arcticintl.com/gtp_usage.asp.
What
do I do if I don't have a Social Security Number?
Students who have worked in the U.S. should have a Social Security
Number for tax filing purposes.
Please visit the following ISSO web page regarding how to apply
for a Social
Security Number.
Otherwise,
you must use an Individual Tax Identification Number (ITIN) for
tax filing purposes. If you have filed U.S. tax forms before
and you were assigned an ITIN, you should use that same ITIN to
file again if you still do not qualify for a Social Security Number. If this is the first time
you are submitting tax returns, Windstar FNTR will assist
you in preparing the W-7 form in addition to all of your other tax
forms so that you can apply for the ITIN and file your tax return
at the same time.
Where
can I obtain the forms directly if I do not use Windstar FNTR?
You
can prepare tax forms on your own by downloading the forms at the
following links:
Where can I get more information?
There
are a number of resources available specifically for international
students and scholars to assist them in understanding their tax
obligations and to help in filing tax forms.
Foreign
Student & Scholar information
This site is a clearinghouse of various topics that relate to
foreign student and scholar tax issues and ITIN issues.
Three links on the Student's page of the IRS Website may be of
particular interest:
- Link
& Learn - This is a good training tool and includes
case studies and quizzes (takes approximately 2-4 hours to go
through thoroughly).
- International
Taxpayer - Provides links to other resources on the IRS
Web site.
- Non-Resident
Alien Toolkit - This is a publication with a PDF Slide
show and FAQs.
Can
I talk to someone?
Federal
tax returns: You can visit the Boston Office of the IRS
from 8:30 am to 4:30 pm Monday through Friday at the John F. Kennedy
(JFK) Federal Building in Government Center on the 7th floor.
This office can be reached by telephone at (617) 316-2850 or via
their website at: http://www.irs.gov/localcontacts/article/0,,id=98286,00.html
Massachusetts
State Forms: You can telephone the Boston Office of the
Massachusetts Department of Revenue (DOR), at (617) 887-6367 from
10 am - 1 pm and 1:30 pm - 4 pm.
Publications
The following publications
may also be helpful.
U.S.
Tax Guide for Aliens
IRS
Publication 519
U.S.
Tax Treaty Tables and descriptions
IRS
Publication 901
Withholding
of Tax on Nonresident Aliens and Foreign Corporations
IRS
Publication 515
Disclaimer
Information presented on this web page is for general information
and is not intended to be, nor should it be construed as, legal
tax advice. While the ISSO has arranged for the services of Windstar
FNTR, international students and scholars can choose how they
wish to complete and submit tax forms as it is the individual's
sole responsibility to meet all tax filing obligations. International
students and scholars are encouraged to follow Windstar FNTR instructions to prepare federal forms online and/or consult the
U.S. Internal Revenue Service (IRS),
local and state tax agencies and tax professionals for advice and
guidance regarding their individual tax situations. |
