You’re working in the United States, and life is good! You received your F-1 Visa and have the student status or job you always wanted.
Because you understand how important it is to keep your legal status, you want to make sure you take care of any F-1 visa taxes you owe.
As an F-1 student or worker, you are exempt from a couple of taxes.
F-1 visa holders are in the United States on a temporary basis. As such, you are exempt from the FICA taxes on wages paid to you for services performed within the United States.
This exemption happens if the job services you perform are allowed by U.S. Citizenship and Immigration Services (USCIS).
FICA stands for the Federal Insurance Contribution Act tax, which was passed in 1935 to help fund Social Security.
Since you are not here on a permanent basis, the United States government considers you exempt from FICA taxes most of the time.
However, there are limits to your FICA exemption which we will go over in this guide. We will also provide other relevant information about F-1 visa taxes.
In addition, every F-1 visa holder is required to file a tax return to remain in good standing. There are no exemptions on this requirement.
We are a premier tax attorney firm. Our objective is to provide tax information to anyone who has questions about their taxes in an easy-to-read and fact-based format.
F-1 Visa Tax Exemptions
Many F-1 students think they are exempt from paying all taxes. That is incorrect information. It can result in many IRS actions which cost you money in penalties and fees.
You will have to pay taxes in some cases if you are an F-1 worker and have a job with a taxable income.
Your tax filings are always mandatory. You must file your tax forms with the IRS regardless of how much tax obligation you owe.
As an F-1 student, you are required to file a tax return as a condition of your F-1 student visa.
However, even if it’s mandatory for you to file taxes, you may not have to pay anything.
But that doesn’t mean you can skip the process of filing your tax return each year that you are here.
There are no exceptions or exemptions from filing your tax return every year. F-1 students and their dependents who maintain their non-resident alien status for tax purposes are required to submit Form 8843 to the IRS.
It doesn’t matter if you earned any taxable income or not. You still have to report this through Form 8843 to the IRS every tax year.
It is possible as an F-1 student that, with all the benefits and exemptions allowed for you based on your status, you will not owe anything.
At times, you may even be entitled to a refund check from the IRS.
What Are the F-1 Visa Tax Exemptions?
F-1 visa holders have a non-immigrant status, which is why they are exempt from FICA taxes on wages paid to them for their work services.
USCIA exempted employment for taxes includes, but is not limited to:
- If you work as a student up to 20 hours a week on-campus during the school year.
- If you work on-campus 40 hours a week during summer vacations and breaks from school.
- You are allowed to work off-campus and still be exempt by USCIS criteria.
- If you are receiving any practical training on or off-campus.
- If you are working as a professor, teacher or researcher.
- If you are working as a physician, au pair or summer camp worker.
If you have an F-1 Visa status but have family or dependents with you while you are here, there are limitations to your tax exemptions. For example:
- You have to pay all taxes including FICA if your spouse or children receive taxable income.
- You have to pay all taxes including FICA if you are working in a job or profession which is not allowed by the USCIS.
- You have to pay all taxes including FICA if there is a change in your immigration status.
- You have to pay all taxes including FICA is you become a legal resident alien in the United States.
F-1 Visa Payroll Taxes
All wage income whether you are an F-1 visa holder or not is subject to three different types of taxes. They are:
- Federal Income tax
- Social Security Tax (FICA)
- Medicare Tax
As an F-1 visa holder, you are exempt from FICA and Medicare payments for a certain period of time.
Many F-1 visa holders get in trouble over taxes because they think taxable income means only money which comes from a job. This is not the case at all.
We provide stellar consulting tax services to make sure you avoid any tax mistakes. Our tax consulting services allow you to concentrate on what you are here to do which is learn more and work in your applicable field of interest.
Other Sources of F-1 Taxable Income
Here are some of the other sources of taxable income you need to know.
- Any employment on or off-campus.
- Any scholarship money you may have received.
- Any fellowship money you may have received.
- If you have received honoraria.
- If you work as a graduate assistant.
- If you are working in any practical or academic training.
There is even a test to determine if your F-1 visa status meets IRS criteria. It is called the Substantial Presence Test (SPT).
The Substantial Presence Test determines if you are a non-resident alien for immigration and tax purposes.
Or it can also determine if you have been in the United States long enough to be considered a resident for tax purposes.
But again, it can get confusing because you may be exempted from ever taking the test. Exempt individuals are usually non-resident legal aliens.
However, this only applies if the non-resident legal alien has been in the United States for less than five years.
Tax Deductions for F-1 Students
F-1 Visa students still must file their taxes every tax year. The non-resident series income tax return does not allow any standard deductions.
However, F-1 students are allowed itemized deductions on any state taxes they pay.
There are more instructions about tax deductions for F-1 student when they file the W-4 tax form they received from their employer.
But yet again there are exemptions you need to take note of before you file your W-4 taxes on the 1040 tax form.
The following exemptions are applicable to the non-resident aliens:
- If the income compensation you were paid is not more than $3000 and you were in the United States for not more than 90 days during the tax year.
- If you were paid compensation as a regular crew member of a foreign vessel.
- If you paid compensation as a resident of Canada or Mexico and you were engaged in transportation-related employment.
- There are certain exemptions available to you if you received your compensation as a resident of American Samoa, Puerto Rico, or the U.S. Virgin Islands.
- If you received compensation when you worked as a foreign agricultural worker who was temporarily admitted into the United States on H-2A visas.
In addition to the above, there are special exceptions given to citizens or nationals from certain countries. To find out if your country has a tax treaty with the United States, look on the IRS website.
F-1 Visa Taxes
You now know as an F-1 visa holder that you have to file tax forms with any payments owed every tax year.
The three types of forms used for your tax filings are:
- A 1040NR-EZ (non-resident) form and Form 8843. These are your non-resident income tax return form.
- A Form 1040 and a Form 8843 (this may or may not be needed) if you are a resident or exempt.
- A Form 8843. This is the form you file whether you have earned any income or owe any F-1 visa taxes.
As an F-1 visa holder non-resident alien, you cannot claim any standard deductions.
In most cases, your employer will be aware of this already and has been instructed to withhold an additional amount from your wages due to this fact.
What Forms Will you Receive as an F-1 Visa Holder?
There are certain income tax forms you are responsible for filing, and your employer or income contributor has to legally get them to you by a certain date. Here is a list of the dates:
- If you received a salary and/or bonus (e.g. internships) you will receive a W-2 no later than January 31.
- If you received bank interest, dividends, stock sales, etc. you will receive a Form 1099 no later than February 15.
- If you received any partnership income (i.e. hedge funds) you will receive a Form K-1 no later than March 15.
- If you have paid your tuition costs, you will receive a Form 1098 no later than January 31.
- If you pay student loan interest for a loan you took out for your tuition, you will receive a Form 1098-E no later than January 31.
- You may also receive a proof of health insurance form 1095 no later than January 31.
Remember if you didn’t earn any income the Forms 1040 or 1040NR do not need to be filled.
But as an F-1 visa holder, it is mandatory for you to register the exempt days you received from the Substantial Presence Test on Form 8843.
As we discussed above, the Substantial Presence Test determines your days in the United State over a three-year time span.
This testing is vital for any future tax returns you file if you want to keep your F-1 Visa status.
F-1 Visa Tax Exemptions
Often F-1 Visa holders can make some pretty common mistakes when filing their taxes.
Over the years, we’ve seen how costly some of these mistakes can be, and have helped our clients by using our exemplary skills to negotiate with the IRS.
Listed below are some of the most common mistakes that we’ve seen over the years.
But it is always better to prevent these mistakes from happening in the first place.
- Filing as a resident when you are exempt as an F-1 Visa holder.
- When you earn income as an F-1 visa holder resident and you file your taxes as such you may pay tax money you don’t owe. Or you may receive money back you should not get. So be careful.
- Completing your W-4 form with the wrong information when you begin a job. This can cause huge problems for yourself by the IRS.
- It could mean your employer did not withhold enough taxes for you based on the information you gave them.
- Your employer may take FICA withholding from you when you are exempt.
- Filling out your W-4 wrong and paying the incorrect amount of payroll taxes.
- This means you are paying FICA taxes on your payroll check. Remember as an F-1 visa holder most of the time you are exempt from paying FICA taxes.
- Not filing your Form 8843 every tax year.
- This can result in many issues with the IRS.
We are the Best Tax Resource for F-1 Visa Holders
We are the best legal tax resource for F-1 Visa holders. We make sure you do not have any F-1 visa taxes you are not prepared for.
The IRS is not an agency you want attention from. Yet many F-1 visa holders don’t use expert legal tax help when they need it most.
That’s why we are committed to providing you with the information you need to not only file your tax forms but to understand them.
All of the mistakes we mentioned above can cause untold penalties and fees that you might not be able to pay.
We provided this F-1 visa tax information guide to make sure this never happens to you.
We also understand you are in the United States to learn, work, and make a difference. We’re willing to bet that so far you’re doing a good job.
Don’t let taxes that you didn’t know about or pay create a legal whirlwind that you feel you cannot escape from.
We are here for you and will help walk you through every tax form due based on what F-1 visa taxes you owe.
Don’t wait to contact us. We can help you with what taxes you owe. You just keep making a difference to the world. We will handle the rest.