The U.S. Tax System
International visitors to the US are often confused by the US tax system. In fact, tax regulations are so complex that a large portion of US citizens and permanent residents pay licensed tax preparers, or even attorneys, to prepare their taxes each year. There are some basic things for you to know, however, and while we at ISSO are not legally allowed to give you tax advice, we hope the general information below can give you a starting point.
You may be surprised to learn that taxes may be deducted from salaries, stipends, and fellowships.
The amount withheld from your paycheck is dependent upon your tax status which, in turn, is determined by your visa classification and the amount of time you have been in the United States.
Income Tax Filing Requirement
International students and scholars who have been in the U.S. for any portion of a calendar year must file annual tax report (also called a "tax return") by the following year's tax filing deadline, which is usually April 15th. Income that is taxed includes wages, scholarships and earnings on investments. The most common type of income is wages; the money withheld from each paycheck is an estimated payment of the federal and state income tax obligation. This money is sent by the employer to the IRS and California Franchise Tax Board. Taxable scholarship payments may have some amount withheld just like wages. Investment income (not including bank interest) rarely has an amount withheld in advance; the applicable tax is paid when filing one's tax forms. International students and scholars must file a tax return even if they did not work in the U.S.
which may exempt you from paying federal income tax in the United States (IRS Publication 901). Information about treaties can be obtained from Tracy Lee in the Controller's Office, telephone (415) 476-4006 email email@example.com.
In order to file a tax return and save time individuals should apply for a Social Security Number (SSN) or Individual Taxpayer’s Identification Number (ITIN) 10 business days after they have checked in with ISSO. Please download application information regarding SSN at www.ssa.gov/online/ss-5.pdf and ITIN at http://www.irs.gov/pub/irs-pdf/fw7.pdf.
How to file?
Forms and Publications (Instructions) are available on the federal and state tax websites. Federal Forms and Publications by mail is available by calling 1 (800) 829-3676.
In addition, UCSF has purchased Glacier Complete International Tax Preparation an internet-based tax preparation system for nonresidents for federal tax purposes. ISSO makes this program available to international students and scholars at UCSF in February.
Those who are taking advantage of their country’s tax treaty with the US will also have the ability to access Glacier via their GLACIER Online Tax Compliance Software account.
What is US Internal Revenue Service?
The IRS is an agency of the Department of the Treasury. It administers US tax collection and enforces internal revenue laws at the national level. You will report your immigration status and personal income to the IRS. Regardless of your nonresident tax or immigration status anyone who arrived in the US should file Form 8843.
What is California Franchise Tax Board?
The California Franchise Tax Board is the state level administration of personal income tax and corporation tax. Note that your federal nonresident tax status might not necessarily mean you will be nonresident for state tax purposes. An international scholar can be a resident for state tax purposes. To determine residency for California state tax purposes, see State of California Franchise Tax Board Publication 1031.
Other Tax Resources
The IRS offers assistance in-person at local offices, via telephone, and they have frequently asked questions on their website.
Assistance is also available through tax preparation services for nonresident and resident aliens. The following list is not an endorsement or recommendation for any of the preparation services but names to help begin your research.
- Volunteer Income Tax Assistance (VITA)
- Tax Aid
- H&R Block
- Online Taxes
- TurboTax for the web
- WorldWideWeb Tax
Tax software is also available at major stores.
ISSO hosts a tax workshop at the beginning of each year. Please check back at the beginning of each year to find the date and location details. The tax workshop will also be sent to scholars on the ISSO listserv. If you would like to get notification of the workshop and are not currently on the ISSO listserv, please email us at firstname.lastname@example.org.