3) Taxes & Compliance
Resident vs nonresident tax status
This is where most people get confused. Your immigration status is different from your tax status. The 'Substantial Presence Test': Generally, F-1 students are considered Nonresidents for Tax Purposes for their first 5 calendar years in the U.S. After 5 years, you might become a Resident Alien for tax purposes. Nonresidents (Form 1040-NR) only pay tax on U.S. income and have different treaty benefits. Residents (Form 1040) pay tax on their worldwide income. Never use TurboTax if you are a Nonresident student! Standard software often files the wrong form.
This is where most people get confused. Your immigration status is different from your tax status.
- The "Substantial Presence Test": Generally, F-1 students are considered Nonresidents for Tax Purposes for their first 5 calendar years in the U.S. After 5 years, you might become a Resident Alien for tax purposes.
- Nonresidents (Form 1040-NR) only pay tax on U.S. income and have different treaty benefits. Residents (Form 1040) pay tax on their worldwide income.
- Never use TurboTax if you are a Nonresident student! Standard software often files the wrong form (1040 instead of 1040-NR), which is technically tax fraud in the eyes of immigration.
Free Resource: Resident vs nonresident tax
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