|
Common
Mistakes When
Reporting Income
(For Tax Year 2007)
There are some common mistakes that international students frequently
make on income tax forms. Here are a few of them.
Mistake 1: Attempting to e-file
(electronically file) the federal income tax return.
Non-residents for tax purposes (F and J students who have been in that
status in the United States for five or fewer years, 2003 or later) and J
scholars/faculty who have been in that status in the United States for two
or fewer years, 2006 or later) are non-residents for tax purposes and must
file non-resident income tax forms. Currently, the federal
non-resident forms, 8843, 1040NR and 1040NR EZ, cannot
be filed electronically. If you have used an e-filer for your
federal income tax returns, and you are a non-resident, you have filed the
wrong forms and will need to file an amended income tax
return.
Mistake 2: Filing Your Income Tax Forms Too
Soon
Do not file your income tax forms too soon! Before you
file, make sure you have a unique W-2 Wage and Tax Statement from each
employer for whom you worked in 2007. If you have not received a W-2
form from each of your 2007 employers, it is your responsibility to
contact the employer and request one.
If you can exempt salary (wages) from tax based on a
tax treaty between the United States and your country AND did the
necessary tax treaty paperwork, you MUST wait until you receive form
1042-S from your employer before filing your income tax forms. If
you are not certain whether you will be issued form 1042-S, check with
your employer.
If you received a scholarship during calendar year
2007, you will receive form 1042-S in mid-March. If you are not
certain whether you will be issued form 1042-S, check with your
scholarship source.
Students from India should note that because of the
unique nature of the U.S. income tax treaty with India, no form 1042-S is
issued for those eligible to claim the tax treaty based on wages (salary).
Therefore, unless you have a scholarship or fellowship grant as described
above, you may file your income tax forms without form 1042-S.
Mistake 3: Confusing wages with
scholarships/fellowships.
All wages are reported on form W-2, and should be indicated
on line 3 of form 1040NR EZ. All scholarships are generally reported on a
form 1042-S, and if coded as a scholarship (code 15 on the 1042-S) is
indicated on line 5 of form 1040NR EZ. If you think you have a
scholarship, but the earnings were reported on a form W-2, it is NOT a
scholarship, and must be reported on line 3 of form 1040NR EZ.
Mistake 4: Putting the wrong amount on line
11 of form 1040NR EZ.
Only state or local income tax withheld can be reported on
line 11 of form 1040NR EZ. DO NOT list federal income tax withheld on this
line, only state and local tax (found on box 17 and box 19 of form W-2 and
also on form 1042-S). Students from India eligible to claim the India Tax
Treaty must put only the standard deduction amount on line 11.
(Tennessee does not have a state income tax.)
Mistake 5: Including your tuition scholarship on line 5 of
form 1040NR EZ
Graduate students who have received a tuition scholarship
from UTHSC should NOT enter the amount of the scholarship on line 5 of
form 1040NR EZ. These tuition scholarships do not fit the IRS definition
of "taxable scholarship."
Mistake 6: Excluding the wrong amount on
line 9 of form 1040NR EZ
You can only exclude an amount on line 9 if you also had a
taxable scholarship/fellowship amount on line 5. Exclusions are limited to
the amount you spent on fees and books during the period you had a
scholarship/fellowship. There are no exclusions for wages reported on form
W-2.
Information provided by
International Student and Scholar Services
Binghamton University (SUNY)
The UT Office of International Affairs is
neither qualified nor permitted to give individual tax advice. Students
with complicated tax situations may wish to consult with a tax preparation
service, professional tax accountant, or tax attorney who is knowledgeable
about nonresident tax law.
Home
Back to Tax Index Page
Disclaimer
|
