Strangefox Posted June 27, 2011 Author Posted June 27, 2011 But you should check with your school and/or read the treaties yourself (they are available online). Do you know where I can find them?
Ninevah Posted June 27, 2011 Posted June 27, 2011 Do you know where I can find them? Here you go: http://www.irs.gov/businesses/international/article/0,,id=96739,00.html Strangefox 1
Strangefox Posted June 27, 2011 Author Posted June 27, 2011 (edited) Here you go: http://www.irs.gov/b...d=96739,00.html Cool! Thanks a lot! Now could anybody help me decipher this? Students, Trainees and Researchers 1. An individual who is a resident of a Contracting State at the beginning of his visit to the other Contracting State and who is temporarily present in that other State for the primary purpose of: a) studying at a university or other accredited educational institution in that other State, or b ) securing training required to qualify him to practice a profession or professional specialty, or c) studying or doing research as a recipient of a grant, allowance, or other similar payments from a governmental, religious, charitable, scientific, literary, or educational organization, shall be exempt from tax by that other State with respect to payments from abroad for the purpose of his maintenance, education, study, research, or training, and with respect to the grant, allowance, or other similar payments. 2. The exemption in paragraph 1 shall apply only for such period of time as is ordinarily necessary to complete the study, training or research, except that no exemption for training or research shall extend for a period exceeding five years. 3. This Article shall not apply to income from research if such research is undertaken not in the public interest but primarily for the private benefit of a specific person or persons. Edited June 27, 2011 by Strangefox
Ninevah Posted June 27, 2011 Posted June 27, 2011 You are both "studying at a university or other accredited educational institution in that other State" and, if you get fellowship, "studying or doing research as a recipient of a grant, allowance, or other similar payments from a governmental, religious, charitable, scientific, literary, or educational organization". So this applies to you. You are exempt from tax for five years. After those five years, you pay taxes. Note that there might be other conditions (like maximum exempt income) elsewhere in the treaty. Check for that.
Strangefox Posted June 27, 2011 Author Posted June 27, 2011 You are both "studying at a university or other accredited educational institution in that other State" and, if you get fellowship, "studying or doing research as a recipient of a grant, allowance, or other similar payments from a governmental, religious, charitable, scientific, literary, or educational organization". So this applies to you. You are exempt from tax for five years. After those five years, you pay taxes. Note that there might be other conditions (like maximum exempt income) elsewhere in the treaty. Check for that. Hm, that is weird. I know another person from my country who studies in the same university and pays taxes. May be this part: "shall be exempt from tax by that other State with respect to payments from abroad" means that I won't have to pay taxes with respect to payments from outside of the US?? Ok, I just need to read the entire treaty, may be things will get clearer after that...
Ninevah Posted June 27, 2011 Posted June 27, 2011 Hm, that is weird. I know another person from my country who studies in the same university and pays taxes. May be this part: "shall be exempt from tax by that other State with respect to payments from abroad" means that I won't have to pay taxes with respect to payments from outside of the US?? Ok, I just need to read the entire treaty, may be things will get clearer after that... What country are you from?
Strangefox Posted June 27, 2011 Author Posted June 27, 2011 What country are you from? Ehhh... Trying to stay anonymous here
Ninevah Posted June 27, 2011 Posted June 27, 2011 Ehhh... Trying to stay anonymous here Oh, sorry, just wanted to check the treaty myself. Strangefox 1
Strangefox Posted June 27, 2011 Author Posted June 27, 2011 Oh, sorry, just wanted to check the treaty myself. No problem Thanks a lot for your help!
Ninevah Posted June 27, 2011 Posted June 27, 2011 No problem Thanks a lot for your help! No problem, I'm always happy to be of some use.
eklavya Posted June 28, 2011 Posted June 28, 2011 ... means that I won't have to pay taxes with respect to payments from outside of the US?? Ok, I just need to read the entire treaty, may be things will get clearer after that... Strangefox, you need to take a vacation. Right away! I can see where you are coming from, as I was in the same boat 5 years ago when I came here for my undergrad, but let me assure you: you don't need to freak out over every single detail. Laws and rules here are certainly different than in our countries, but nothing to worry about - you will learn/yield as you continue to live here. About paying taxes: yea, you will have to pay taxes (more or less % depending on which state you are going), but you will get it back at the end of the year. Penny for penny, I guarantee. Tho, state taxes aren't/might not be 100% refundable. Fellowship money, scholarship money, TA/RA money are all liable to taxation. Even after living here for >5 years, you will be able to claim the amount that was taxed and get it back, because you aren't a citizen here. That said, check the treaty between your country and the US, as Ninevah said above. For mine, I get everything back at the end of the year.
Strangefox Posted June 28, 2011 Author Posted June 28, 2011 Strangefox, you need to take a vacation. Right away! You are so right!!!
MoJingly Posted June 29, 2011 Posted June 29, 2011 You are so right!!! I was just reading this thread because I find government paperwork so confusing. I just filled out all of the paperwork to get paid with my fellowship, and even though I'm an American citizen and I've filled these same forms out with every new job, I turn into a babbling idiot once I get them in my hands. I maintain that they are confusing for a REASON. America loves to tax. If you know what you are doing and fill stuff out correctly, then they have to tax you less. (Or give you a big refund back in April). So what's the solution? Make it confusing so people just give up! (OK, so maybe that was a bit dramatic, but I think there is some truth to it). Anyhow, the point to this is not to get too frustrated because even Americans are confused by America's paperwork. :-) You'll be fine. ImagineMe 1
Ninevah Posted June 29, 2011 Posted June 29, 2011 Anyhow, the point to this is not to get too frustrated because even Americans are confused by America's paperwork. :-) You'll be fine. Hehe, actually people like me have great experience in dealing with slow and rude bureaucracies in their countries. Filing my own taxes and some forms won't scare us
MoJingly Posted June 29, 2011 Posted June 29, 2011 Hehe, actually people like me have great experience in dealing with slow and rude bureaucracies in their countries. Filing my own taxes and some forms won't scare us I guess that's true! Everybody has to deal with it. It just... hurts... my brain.
Strangefox Posted June 29, 2011 Author Posted June 29, 2011 I was just reading this thread because I find government paperwork so confusing. I just filled out all of the paperwork to get paid with my fellowship, and even though I'm an American citizen and I've filled these same forms out with every new job, I turn into a babbling idiot once I get them in my hands. I maintain that they are confusing for a REASON. America loves to tax. If you know what you are doing and fill stuff out correctly, then they have to tax you less. (Or give you a big refund back in April). So what's the solution? Make it confusing so people just give up! (OK, so maybe that was a bit dramatic, but I think there is some truth to it). Anyhow, the point to this is not to get too frustrated because even Americans are confused by America's paperwork. :-) You'll be fine. Actually, my school has some sort of online system for paying taxes and apparently it does all the hard work for you (or at least that's how I see it with my optimistic mind's eye). Otherwise, I will find a tax specialist! Schools usually have those hidden somewhere, right?? I won't let them take too much of my money!
MoJingly Posted June 29, 2011 Posted June 29, 2011 I won't let them take too much of my money! That's how we all feel! And chances are, after you do your taxes, you will end up getting money back. (Unless they figure out they didn't tax you enough, in which case you will have to PAY even more -- unlikely for you I bet). When the time comes, try TurboTax online. This was the first year I did all my own taxes and I had some confusing stuff to deal with (stocks, inheritance, loans...). It made the process SO much simpler and at around $50, it's money well spent. Strangefox 1
Ninevah Posted June 29, 2011 Posted June 29, 2011 (edited) I guess that's true! Everybody has to deal with it. It just... hurts... my brain. Actually, if you look at the forms, have the patience to read the instructions and do it yourself, you won't even have to spend $50. The federal tax form 1040NR-EZ is 2 pages long and most of it won't apply to you (Unless you have inheritance and stocks but I doubt it) Schools don't generally have a tax specialist - they are not supposed to. As for the online system, I'm not sure if it is for international students. I think it can be used to but don't worry about that - you have a whole year before that time comes. Edited June 29, 2011 by Ninevah
Strangefox Posted June 29, 2011 Author Posted June 29, 2011 Schools don't generally have a tax specialist - they are not supposed to. As for the online system, I'm not sure if it is for international students. I think it can be used to but don't worry about that - you have a whole year before that time comes. My school does have such a tax person, at least I have seen their phone number on my school's website. And it's not just any tax person - it's a Nonresident Alien Tax Specialist! And they do have the online system that is for international students as well. I checked! But what do you mean when you say that I have a whole year? You mean, till April, when they are supposed to give me my money back? But I guess I will need to figure out all stuff with taxes before that because federal tax is paid quarterly (or monthly??), right?
Ninevah Posted June 29, 2011 Posted June 29, 2011 (edited) My school does have such a tax person, at least I have seen their phone number on my school's website. And it's not just any tax person - it's a Nonresident Alien Tax Specialist! And they do have the online system that is for international students as well. I checked! But what do you mean when you say that I have a whole year? You mean, till April, when they are supposed to give me my money back? But I guess I will need to figure out all stuff with taxes before that because federal tax is paid quarterly (or monthly??), right? The tax is deducted from your checks whenever you get them. When you arrive you'll have to fill some forms in the payroll office, where if your treaty gives you some tax benefits they'll tell you (but ask if they don't). Around February you'll get some documents that you'll need to attach to the yet another tax return documents and you'll have till April 15 to send them to the IRS. You'll get at least some of your taxes back maybe a month after you send everything. Edited June 29, 2011 by Ninevah
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now