 Tax Basics
 Forms You RECEIVE
 Forms You COMPLETE
 Tax Residency Status
 Tax Filing Information for Non-residents
 Treaty Information
 Filling out the forms
 Completing the Process
 State Tax Issues

Aahhh!
No Matter What You Have Heard…
 All “ tax non-residents ” are legally required to file at least one federal income tax form for each year they are in the U.S. (by April of following year)
 Everyone should copy and keep files for 7 years or until you become a permanent resident (if applicable)

 You may be overpaying your taxes (i.e., giving away your hard-earned money)
 Non-filing of taxes may affect a future application for U.S. Permanent Residency (i.e.,
“ green card ” )
 If you owe money, you could be subject to substantial monetary fines
 In extreme cases involving fraud, you could lose your legal immigration status in the U.S.

 Federal
 State
 Local (not in Albuquerque)
 If you have income you are normally responsible for completing tax forms for
ALL relevant governments
 This presentation only covers FEDERAL
(US) taxes collected by the Internal
Revenue Service (IRS) with some state at the end

1)This is NOT a conspiracy against you! (It ’ s just a pain for everyone!)
2)The rules are NOT logical!
3)YOU are responsible for doing it correctly and
YOU suffer the consequences even if you were misinformed. This is more unfair for internationals as very few people know non-resident tax laws, including IRS

 International Students: Full-time students in F-1 or J-1 Student Status (individuals in degree programs, CELAC, exchange students)
 Dependents: Those who are here in F-2 and J-2 status with no income. Most dependents CANNOT be claimed, but if so will need an SSN or ITIN# (requires form W-7 and supporting documents)

 For students with income typical at UNM.
Otherwise seek professional tax advice from a qualified accountant or attorney
 Rules for students and scholars are different
 Special Cases: Anyone whose total stay will be less than one year; special treaties:
Canada, India, Korea, Mexico (we will discuss these at the end)

Come to the Tax Volunteer Site!
"Volunteers in Tax Assistance" (VITA) Site
Volunteers will be available to help you on
Fridays from 2:00 – 4:30, from March 14 through April 11 th .
WHERE: Language Learning Center, Ortega
Hall, 1 st floor. Will have tax software to help.

 Internal Revenue Service (IRS) : www.irs.gov
or call 267-941-1000, Press 4 and then 4 again for an International Tax issue for individuals. Tax treaties and forms are online.
 Commercial sites : www.arcticintl.com/cintaxorder.htm
, www.thetaxguy.com
offer information and paid tax return preparation
 Residents for Tax Purposes : Go to CNM website for appointment with the Resident tax volunteers, or seek paid preparers

 U.S. tax system = Employer “ withholding ” + individual “ reporting ” at end of year. They take money out based on forms you fill out
(W-4, 8233)
 At year end YOU need to do the accounting; if the calculation was incorrect then either
YOU or the GOVERNMENT will owe money
 If you worked at UNM all year, completed employment forms correctly, and your situation did not change, the tax withheld should be “ near ” correct (RAs and PAs may owe money)

Copies to be sent to IRS with your tax returns

W-2: lists wage income and tax taken for federal, state, and local governments (if applicable); must be sent to you by 1/31
1042S: lists scholarship and treaty income; must be sent by 3/15
1098T: lists school tuition paid; cannot be used as deduction by tax non-residents
This information is also sent to IRS

Gross Earned Income
Money taken out of your pay
Box 1 = Wages
Box 2 = Federal Tax Withheld
Box 17 = State Tax Withheld
Non-residents should not have amounts taken in 5 &6

Income Type
(key attached)
Gross
Income
Box 1 = Income Code/Type
Box 2 = Income exempt from tax
Box 7 = Federal Income tax withheld
Box 23 = State Income tax withheld
State tax taken
Federal tax taken

1099-INT: Interest report (Bank sends to you if over $10)
1099-DIV : Dividend report (Financial institution sends to you – if you have this you will use 1040NR)
1099-MISC : Honoraria or contractor income report
This information is also sent to IRS

Make copies for your files!

8843: Must be completed by all F and J students, scholars, and dependents who are
“ tax non-residents.
”
This form is also called, “ Statement for
Exempt Individuals and Individuals with a
Medical Condition.
”

1040NR: “ U.S. Nonresident Alien Income Tax
Return ”
OR
1040NREZ: “ U.S. Income Tax Return for Certain
Nonresident Aliens with No Dependents ”
These forms must be completed by tax nonresidents with U.S. income. They are also called “ Tax Returns ” ( “ Return ”  you get money back)

8233 : Must be completed and given to the payroll office every year if you want to benefit from a tax treaty in advance (i.e., you don ’ t want them to take extra money from each paycheck)
You can still get the benefits of any treaty at the end of the year even if you did not complete this form

Publication 519: U.S. Tax Guide for Aliens
Publication 901: U.S. Tax Treaties
These publications have additional information for those with unusual situations or for whom a tax treaty exists between the
U.S. and the country of permanent residence

 Tax residency determines your basic obligations under U.S. “ federal ” tax law (state is different)
 You CAN be a “ tax resident, ” even if you are not a
"permanent resident" of the US (green card)
 If you are a resident taxpayer you must pay federal income tax on your worldwide income. However, you do not have to file a "tax return," unless your worldwide income exceeds a certain amount (This year: $10,000 if single and $20,000 if married)

 If you are a nonresident taxpayer, you pay federal income tax only on the income you receive from U.S. sources, but you must file an annual income tax form, even if you had no income
 Most F and J students at UNM are “ tax nonresidents ”
 If you were in a status other than F or J since your arrival, please see pp. 4-11 of IRS pub 519, U. S. Tax
Guide for Aliens you may be “ Dual Status ”

Residency Test for Students
STUDENTS (F-1 or J-1):
How many years have you been in the U.S. in
F, J, M or Q status?
Less than 5 years
(e.g., You arrived AFTER
12/31/2008 and you were never in the US before on F, J, M, or
Q status)
More than 5 years
(e.g., You arrived BEFORE
1/01/2009 or you were in the US for more than 5 years total in F, J,
M, or Q status since 1985)
You were probably a
“ nonresident for tax purposes ” in 2013
You were probably a
“ resident for tax purposes ” in 2013

 “ Residents for tax purposes ” will need to go elsewhere for tax information
 You would file: 1040EZ OR Form 1040A OR
Form 1040
 Get help from the resident volunteers at CNM

 Those who were single and earned less than
$10,000 worldwide income in 2013 (or married and earned less than $20,000) do not have to file a federal tax return, but may want to get a refund if taxes were taken

Form #
8843
Who Completes?
ALL non-resident students and scholars and their dependents. If you did not have any US income you ONLY need to complete this form
1040NR If you received money from a US source, you also MUST complete form 1040NR if: a. Your income was $100,000 or more, OR b. You had dividend, capital gains or other US income that his not wage or scholarship
YOU MAY ALSO WANT TO COMPLETE FORM 1040NR IF: c. You were married and you can claim an exemption for your spouse
(you can claim an exemption for your spouse ONLY if your spouse did not work AND you are from Canada, Mexico or Korea)(US-born children ask)
OR IF: d. You can claim educational, travel, or living expenses*
1040NREZ If you received money from a US Source and none of the conditions for
1040NR above apply fill out this form with 8843

Every Tax Non-resident fills out this form, even dependents

8843 Student Sample
SSN or ITIN otherwise write “None”

8843 Student Sample
Number of days you were in student status

8843 Student Sample
University of New Mexico, MSC06 3850, Albuquerque, NM 87131
Linda Melville, Global Education Office, MSC06 3850
1 University of New Mexico, Albuquerque, NM 87131-0001

8843 Student Sample
Diversity Visa Lottery does
NOT count

Sign here if no tax return

 If you had no US income in 2013 and you are a non-resident you are DONE!
 Make a copy for your files and mail before
June 15, 2014

Internal Revenue Service Center
Austin, Texas
73301-0215

 Students can deduct educational expenses only if they already worked in the field that they're studying now (before beginning studies) and if the current studies will not prepare them for a new field e.g., if you have a BS in Architecture, have worked as an architect, and are studying for the MS in
Architecture, you may be able to deduct your educational expenses from your income
 NO NEED IF YOU WILL GET ALL YOUR
MONEY BACK!

 If you think you may be able to deduct your educational expenses, please see IRS
Publication 970 (beginning on P. 59), “ Tax
Benefits for Education;" if you decide that you can deduct educational expenses you may need a copy of IRS Form 2106,
"Employee Business Expenses," in addition to your other tax forms
 NO NEED IF YOU WILL GET ALL YOUR
MONEY BACK!



Students can only deduct travel or living expenses if they are a federal tax nonresident and the entire educational program/stay in the
U.S. lasts less than one year (365 days);
In this case, you may be able to treat your stay in the U.S. as a "business trip" and deduct your airfare, rent, local transportation expenses and part of a daily allowance for food from your income. If you will be in the U.S. for a total of less than one year and your expenses are more than
2% of your income, get Form 2106 from the IRS website, complete it and list your expenses on page 3, line 9 of form 1040NR.

 Non-service scholarship or fellowship grants from U.S. sources


Amounts granted to cover tuition and fees are not taxable; these amounts do not have to be reported on your tax return)
The University or other granting institution should report any portions which are not tuition or educational expenses to you on IRS Form
1042-S (e.g., Athletic scholarships at UNM)

 Wages from any U.S. job, including a teaching assistantship or a research assistantship


ALL income that your employer(s) reported to you on Form W-2 )
Any amount reported on Form W-2 cannot be considered non-service scholarship or fellowship income but might be treaty exempt income
 Bank interest

(These are also subject to tax )
 Dividends or capital gains from U.S. mutual funds, stocks or bonds
 Any other income (such as rent, royalties, copyright earnings) from U.S. sources
 If you had these types of income you will need form 1040NR and you may want to seek professional advice in preparing your return

 Some countries have tax treaties with the
U.S. which may save you money on your federal income tax. You can get the treaty benefit even if you did not complete the
8233 in 2013
 Treaty benefits depend on country of last tax residence, not citizenship
 Benefits are different for each country and depend on your activity in the U.S. (e.g., student or scholar) and type of income

 For students, these benefits often last for
5 years (the same amount of time you are a tax non-resident – China is an exception)
 Type of Income Important: one chart for wages and one for non-service scholarship

 The numbers or Roman numerals in the third column identify the relevant treaty article and paragraph numbers (you will need these for your income tax return)
 Also note any letters next to the name of your countries; there is a key at the end of the chart

Student Tax Treaty Summary
For WAGES
Country
Bangladesh
Barbados
Belgium
Bulgaria
Canada
China
Maximum
Presence
2 yrs.
-
No limit
No limit
5 yrs.
No limit
Cyprus 5 yrs.
Czech Republic 5 yrs.
Egypt 5 yrs.
Estonia
France
Germany
Hungary -
5 yrs.
5 yrs.
4 yrs.
Amount Article #
Special Restrictions
* see below
$ 8,000 21 (2) In effect after 01/01/07, b
**see special note below
$ 9,000 19 (1)(b) b, g, h ***see special note below
$ 9,000 19 (1)(b) b, g, h ***see special note below
$10,000 XV
$ 5,000 20 (c) a b, c
$ 2,000 21 (1)
$ 5,000 21 (1)
$ 3,000 23 (1) b, i b, c, d b, c, i
$ 5,000 20 (1)
$ 5,000 21 (1)
$ 9,000 20 (4)
b b, g, h b, c, e **see special note below
**see special note below

Iceland
India
Indonesia
Israel
Jamaica
Korea
Latvia
Lithuania
Malta
Morocco
Netherlands
Norway
Pakistan
Philippines
Student Tax Treaty Summary
For WAGES
5 yrs.
$ 9,000 19 (1)
5 yrs.
5 yrs.
5 yrs.
-
5 yrs.
5 yrs.
5 yrs.
Standard
Deduction
21 (2)
$ 2,000 19 (1)
$ 3,000 24 (1)
-
$ 2,000 21 (1)
$ 5,000 20 (1)
$ 5,000 20 (1)
No limit $ 9,000 20 (2)
5 yrs.
$ 2,000 18
No limit $ 2,000 22 (1)
5 yrs.
$ 2,000 16 (1)
No limit $ 5,000 XIII (1)
5 yrs.
$ 3,000 22 (1) b, c, h
For 2011 this is $5,800 b b, c, h
**see special note below b, f, g, h b b b b, c b, c b, f, h

Student Tax Treaty Summary
For WAGES
Poland
Portugal
5 yrs.
5 yrs.
Romania 5 yrs.
Slovak Republic 5 yrs.
Slovenia
Spain
5 yrs.
5 yrs.
Thailand 5 yrs.
Trinidad & Tobago 5 yrs.
Tunisia 5 yrs.
Venezuela 5 yrs.
$ 2,000 18 (1)
$ 5,000 23 (1)
$ 2,000 20 (1)
$ 5,000 21 (1)
$ 5,000 20 (1)
$ 5,000 22 (1)
$ 3,000 22 (1)
$ 2,000 19 (1)
$ 4,000 20
$ 5,000 21 (1) b, f, h b b, f, h b, c, f b, c, h b b, c, f, h b, h b b

Student Tax Treaty Summary
For WAGES
* Special Restrictions a student is taxed retroactively on full amount if income is over $10,000 b if within the time limit, the student may claim tax treaty even if s(he) qualifies as "resident alien" for tax purposes but not applicable for permanent resident or immigrant status. Students from PR
China however, may claim the treaty as long as they are primarily enrolled to be a student, even if they become US permanent residents or have immigrant status.
c if treaty benefits are used as a student, they may not be used immediately following as a teacher/researcher d treaty benefits may be used only once in a lifetime e tax is retroactive if the student remains past 4 years f if individual re-establishes home country residency s(he) can claim both student & teacher treaty benefits g student can claim back-to-back treaty exemptions as a student then as a scholar h limited to 5 calendar years from date of arrival in the U.S.
i students continuing on for graduate level studies may continue to claim treaty benefits for the additional time needed to complete degree requirements
** Special note: Students from Barbados, Hungary & Jamaica can elect to be treated as a
"resident alien" for tax purposes. This benefit is not available to scholars/researchers from these countries.

Student Tax Treaty Summary For NON-
SERVICE SCHOLARSHIP
Country
Armenia
Azerbaijan
Bangladesh
Belarus
Belgium
P.R. China
Cyprus
Czech Republic
Egypt
Estonia
France
Georgia
Germany
Maximum
Presence
5 years
5 years
No limit
5 years
5 years
No limit
5 years
5 years
5 years
5 years
5 years
5 years
No limit
Amount Article #
$10,000
$10,000
No limit
$10,000
No limit
No limit
No limit
No limit
No limit
No limit
No limit
No limit
No limit
VI (1)
VI (1)
21 (2)
VI (1)
21 (1)
20 (b)
21 (1)
21 (1)
23 (1)
20 (1)
21 (1)
VI (1)
20 (3) a
Special restrictions
* see below a a
In effect after 01/01/07 a b

Student Tax Treaty Summary
For NON-SERVICE SCHOLARSHIP
Iceland
Indonesia
Israel
Kazakstan
5 years
5 years
5 years
5 years
Republic of Korea 5 years
Kyrgyzstan 5 years
Latvia 5 years
Lithuania
Moldova
Morocco
5 years
5 years
5 years
Netherlands
Norway
3 years
5 years
No limit 22 (1)
No limit 19 (1)
No limit 24 (1)
No limit 19
No limit 21 (1)
$10,000 VI (1)
No limit 20 (1)
No limit 20 (1)
$10,000 VI (1)
No limit 18
No limit 22 (2)
No limit 16 (1) a a

Student Tax Treaty Summary
For NON-SERVICE SCHOLARSHIP
Philippines
Poland
Portugal
Romania
Russia
Slovak Republic
Slovenia
Spain
Tajikistan
5 years No limit 22 (1)
5 years No limit 18 (1)
5 years No limit 23 (1)
5 years No limit 20 (1)
5 years No limit 18
5 years No limit 21 (1)
5 years No limit 20 (1)
5 years No limit 22 (1)
5 years $10,000 VI (1) c a

Thailand 5 years No limit 22 (1)
Trinidad & Tobago 5 years No limit 19 (1)
Tunisia 5 years No limit 20
Turkmenistan
Ukraine
Uzbekistan
Venezuela
5 years $10,000 VI (1)
5 years No limit 20
5 years $10,000 VI (1)
5 years No limit 21(1) a a c

* Special Restrictions a also exempt are scholarship/grant amounts of up to $10,000 received from U.S. soruces to provide ordinary living expenses.
b does not include Hong Kong c students continuing on for graduate level studies may continue to claim treaty benefits for the additional time needed to complete the degree requirements

 Always look to complete the easiest form first. If you can get all your money back, there is no reason to complete the long form
 We will cover form 1040NREZ; if you need to do 1040NR come to the VITA site

 Complete this form first unless you have non-wage income
 If you get all your money back, you will send this form
 If you have other income or deductions
(such as contributions to US charities), the
1040NR may help you get a larger return

 Look carefully at all W-2 and 1042S forms: is all your income included here?
 Is there any treaty income listed on the W-
2 that should have been on the 1042S?
 Do you have any questions about what is on these forms?
 Contact payroll: syoung@unm.edu

 Add all of your earnings income together from these forms (interest and dividend income are separate)
 Subtract all of the income that should have been covered by the treaty
 The remainder is your taxable wages

1040NREZ Student Sample
Use a US address unless you won’t be here through June

1040NREZ Student Sample

1040NREZ Student Sample

1040NREZ Student Sample

1040NREZ Student Sample
Put this amount on line 6 on front of form

Sample for student with treaty
$5,000

 Make sure you add all your income together from all forms (W-2 and 1042S)
 Then subtract your treaty income from the total
 The amount covered by the treaty goes on line 6
 The remainder goes on line 3 unless you have a non-service scholarship (e.g. althletes) which goes on line 5

Put all income NOT covered by treaty on line 3
Put Treaty income on line 6
Non-service scholarship income goes on 5 (should be on 1042S)

Put any scholarship income used to buy books or other educational materials on 8 (you can only put this if you have a scholarship on line 5)

Total State Tax amount taken goes here – From
W2 box 17 and 1042S box 23 unless you are a student from India (then put $6,100)

EVERYONE:
Put $3,900 here
Tax from table
This is your taxable income, look at tax table in instructions beginning on page 23, find the amount and look to the right for your tax. Write the tax in 15

Enter amount of federal tax taken from box 2 of W-2
Enter amount of federal tax taken from box 7 on the 1042S, if any
Enter total here

 If line 21 is more than line 17, you overpaid: Subtract line 17 from line 21 and write the remainder on line 22.
 If line 17 is more than line 21 you owe money: Subtract line 21 from line 17 and write the remainder on line 25. This is what you have to pay by check to IRS.

Amount to be refunded
Amount Owed

Enter UNM Site ID#

 Copy all documents for your files
 Mail Together:
 8843
 1040NREZ
 Copy of W2
 Copy of 1042s
 Copy of any other earnings forms

 If you do NOT need to pay any additional federal tax, mail to:
 Department of the Treasury
 Internal Revenue Service
 Austin, TX 73301-0215
 If you DO NEED to pay additional federal tax mail with payment to:
 Internal Revenue Service
 P.O. Box 1303
 Charlotte, NC 28201-1303

Come to the volunteer hours:
 For students with dependents from
Canada, Mexico, India or South Korea who cannot get all their money back from completing form 1040NREZ
 For students with income other than wage
 For students with income more than
$100,000
 For students who have other deductions
(charities, losses, etc.)

 Once you complete your federal tax you can complete the state tax forms
 You will need the “ Adjusted gross income ” , “ Itemized deduction ” and
“ exemption ” amounts to do your forms
(see handout)
 Forms and instructions are on the website: www.tax.newmexico.gov/Individuals/Pages/Pers onal-Income-Tax-Forms

 People who reside in New Mexico for more than 185 days are residents for state tax
 Not supposed to e-file as the on-line program may not allow you to put less than standard deduction (and internationals usually don ’ t get this much unless you area a student from India)

 If all your income was exempt by treaty and was on a 1042S (not a W2) you do need to file state forms
 If more than $10,000 of your income was on a W-2 OR if you had state taxes withheld and you want the money back, you will need to file state tax forms

 If you will file state tax forms, and you have a treaty, you should include copies of the federal forms with your state tax forms
 You may also want to include a letter stating that you are a federal tax nonresident and that some of your income is not taxable because of the treaty (it would not hurt to include the relevant text from the treaty (available at www.irs.gov)

Come to our VITA site for help!
Fridays, March 14 th – April 11 th
2:00 – 4:30 pm
Language Learning Center
Ortega Hall, 1 st Floor

OR:
 https://trr.windstar.com/
 Access Code: 85N8BLEN6LEG