Income Tax Regulations

All F-1 and J-1 visa holders are required to file a statement with the Internal Revenue Service (IRS) each year, regardless of whether or not income was earned in the U.S.

Even though you may not owe any taxes to the US government, you are required to prepare a statement and complete various forms. April 15 is the deadline for preparing your tax forms each year, reporting any income earned during the preceding calendar year. US Payroll taxes work as follows. The amount of payroll taxes each person is required to pay depends on several things: how much income is earned, how many dependents the employee has, how many assets or liabilities they have, whether or not they are a US citizen or present on a temporary visa, etc.

Each time a U.S. employee accepts employment, s/he must tell the employer how much money to withhold from his/her regular paychecks to be put into an account towards the income taxes s/he will owe in April. This is done by filling out a form indicating the number of dependents or exemptions that person will be able to claim. Based on that information, the employer withholds a certain amount of income from the employee each month, and sends it to the Internal Revenue Service, the government agency responsible for tax reporting. Then, sometime between January and April 15 of each year, the employee files the completed forms with the IRS, indicating how much money they earned in total, the number of dependents, etc.

The final total of taxes due is calculated at that time. If the employee has had more withheld from his/her paycheck than s/he owes, the IRS will issue a refund check. However, if the employee has not had enough taxes withheld from his/her individual paychecks; s/he must write a check to the IRS to make up the difference.

Your income tax requirements and procedures are essentially the same as described above. When you begin employment in the US you will be asked to complete numerous forms for identification and tax purposes. You are encouraged to bring those forms to the ISA for assistance in their completion. One of the forms verifies that you have the right to legally accept employment in the United States (I-9), and the other forms indicate whether or not income taxes should be withheld from your paychecks (W-4 and/or VA-4).

If you will only be working a minimum of time during the school year and returning home in the summer, you will not be likely to owe any income taxes in April, and you can therefore opt to not have any withheld from your regular paychecks. However, if you intend to work full-time during the summer months in addition to your job during the school year, it is probable that you will earn more than the threshold amount ($3,400 in 2007), and owe taxes in April. In that event, you may choose to have some money withheld from each paycheck with the understanding that if more is withheld than what you will owe you will obtain a refund.

The ISA makes every effort to assist you in making these decisions, but it should be understood that there is no exact science for making these determinations, and there is no guarantee that your taxes will come out exactly as you had anticipated.