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1040NR 1040NREZ

Annual Tax Returns

In many countries, the government assesses and collects taxes that are owed. But in the U.S. it is each individual's own responsibility to meet his or her tax obligations. Each student or scholar is responsible for helping his or her employer estimate how much to withhold (deduct) from the student's or scholar's pay for income tax. The employer pays those amounts directly to the U.S. Treasury on the employee's behalf. A student's or scholar's yearly tax return must reconcile the amounts withheld with actual tax liability for that year. If too much was withheld from pay, the Treasury will refund the excess after receiving the return.

NONRESIDENT ALIENS STUDENTS & SCHOLARS Nonresident aliens who are students, teachers, or trainees, and are temporarily present in the U.S. in F, J, M, or Q immigration status, must file a return if they have income that is subject to withholding, even if no tax was withheld. (Caution: Even if they are exempt from filing a return, they must still file an 8843 Tax Form.) .

FORM 1040NR OR 1040NR-EZ? Once you have determined that you need to file a return, you should choose the best form to use. Nonresident aliens file either Form 1040NR or Form 1040NR-EZ. Form 1040NR is 5 pages long and can accommodate all types of income and expenses. Form 1040NR-EZ is only 2 pages long and is limited to specific situations. Nonresidents cannot file joint returns, and are very limited in claiming dependents. You should choose the simplest and shortest form that will accommodate all the your income and deductions. You can use Form 1040NR-EZ instead of Form 1040NR if all nine of the following statements are true:

1. No dependents are claimed (rules for this are covered in Lesson 4).

2. The taxpayer cannot be claimed as a dependent on another U.S. tax return.

3. The only sources of income were wages, salaries, tips, taxable refunds of state and local in

come taxes, and scholarship or fellowship grants.

4. Taxable income is under $50,000.

5. The only adjustment to income is the student loan interest deduction or scholarship exclusion.

6. No tax credits are claimed.

7. No exemption is claimed for the spouse.

8. The only itemized deduction is state and local income tax.

9. The only taxes owed are income tax.

FAILURETO FILE Many students and scholars who are required to file returns either don't file, or file incorrectly. Many of them would be eligible for a refund if they filed the required forms. They would rather forgo the refund than try to figure out what they should file and when. The IRS will not penalize you for not filing a tax return if you owe no tax. However, you must still file Form 8843.