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Taxes in the US

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If you work for pay while in the US, you will need to consider whether you are required to submit tax returns, which are forms sent to the government at the end of the tax year, confirming how much you earned and how much tax has been taken out of your wages.

In the US, there are both federal taxes (which are used for nationwide spending) and state taxes (which are used by each state for their own spending). So, if you work in Iowa, you need to know about federal taxes and Iowa state taxes.

How taxes work in the US

In the US, the federal taxing authority is called the Internal Revenue Service, or IRS for short. 

When you begin working for an employer, he or she will ask for your Social Security Number. Then, at each pay period, your employer will withhold taxes from your paycheck and give this money to the government. Using your Social Security Number, your employer and the IRS keep track of how much money has been taken from your wages for taxes.

At the end of the tax year (December 31), your employer informs the government and you of your total taxes withheld in a form called a W-2. You then use this W-2 to determine whether you have overpaid or underpaid your taxes for the year. This may depend on whether you had expenses in the year that could be deducted from your income, or if you had your employer withhold too little or too much from your wages. 

 If you have overpaid, you will be given a refund.  If you have underpaid, you will be asked to pay the balance to the IRS.

A similar system is in place for state taxes.

Federal taxes

The best place to begin to learn about your federal tax obligation is the IRS website on filing requirements for international students.

It is important to note that, if you earn a small amount in the year (less than $3800 in 2013), you may not HAVE to file a tax return. However, it can be beneficial to file a return, because in many cases you can receive a refund from the IRS for taxes taken out of your wages during the year.

April 15 is the day that US federal taxes are due each year. You will receive your W-2 in January. Therefore, you have from January to April 15 to complete your tax return.

Many students seek out assistance in completing their federal and state tax forms. We strongly suggest either of the following:

  • Using a tax professional. There are many firms of accountants in the area who specialize in  preparing tax returns from January - April, and their services are relatively inexpensive for simple tax returns.
  • Using software specifically designed to assist non-immigrants with completing their tax forms, called Glacier Tax Preparation. The software generates the appropriate tax forms after you complete a series of questions. It's inexpensive and is a quick way to complete your forms on your own. When visiting the link above, choose the product for "individuals."


State taxes

Each US state has state forms as well, although the tax withheld and tax payable is usually much smaller than the federal tax obligation.

Tax professionals can assist with State tax forms, or you can do these yourself. The Glacier Tax Preparation product does not assist with your state return. It is best to prepare both your federal and state tax returns at the same time.

Questions

Students should contact a tax professional or Glacier Tax Preparation directly with your tax questions. The International Student Services Office is happy to give you further information on tax profesionals in the area and on the Glacier Tax Preparation system.