caleyjag

I work for a gigantic university. I am under the impression they take care of all my tax paperwork for me. Nobody has ever told me I need to deal with the IRS directly, such as filling out tax returns, as long as I get the hell out of the country before my 2 years on the J1 is up.

However the department that handles all this did not seem to be sure of an algorithm to calculate what I might owe in 2009 if I stay on. That's what I'm trying to figure out here.

I know exactly how much federal tax I am avoiding paying due to the UK treaty - it is printed on my paycheck. What I am not sure is the level of fines and interest the IRS imposes for retroactive taxes. Just a ballpark figure would do.

Where would I go to find out this information?

AdobePinon

Tax returns are the responsibility of the individual. I highly doubt that your university is doing this for you unless you are paying them to do so. In J-1 status, you are required to file at least forms 1040NR / 1040NREZ and 8843 regardless of income. Maybe others too, don't know.

caleyjag

OK. Thanks for the tips. I have never even heard of a 'tax return' before. I'm young and have not yet had a tax-paying job since I left university. I got a W2 form a couple of months ago but I have no idea what it's for.

When I arrived here I filled out a bunch of documents for the J1 tax treaty, and my paychecks have said I am exempt from tax ever since, so I have not ever stopped to worry about all this. As you can see I am quite naive about it all.

I am not particularly well off right now (post-doc salary is not great) and I am not too keen on the idea of employing lawyers and accountants if it can be avoided. Sounds like that route might be quite expensive.

I will check in with the university advisors first thing tomorrow morning to see what I need to do.

AdobePinon

Prepare yourself for the standard response - "We are not able to give tax advice" - i.e., they don't represent you. Hopefully they'll at least point you to something more useful.

A couple of useful documents from irs.gov: Pub 519 (Tax guide for aliens); Pub 901 - I think - (Tax treaties). You will need substantial quantities of caffeine to accompany them, but most answers will be there if you can suffer them (and re-suffer them).

MsElui

you dont need a lawyer - just an experienced accountant. They should be able to quote you for how much they would charge to prepare one years returns. If this is your only form of income (ie not recieving dividends or interest payments or rent or pensions or capital gains etc) then it should be very quick to prepare the return.

Rete

Please do not tack your thread on the end of someone else's thread. It will almost certainly be overlooked. I have started a new one for you.

Rete

No one takes care of your taxes but you. An employer has the obligation to withhold tax money from your salary, quarterly turn it over to the appropriate tax department, etc. and give you a W-2 by the end of January for the previous year. It is your responsibility to file taxes.

As for the UK-US tax treaty, that only means that you have to pay tax on the earnings in one country, not in both, and it is usually paid in the country in which you earn it.

AdobePinon

That's an entirely different tax treaty, Rete.

Rete

Oops, sorry didn't realize there was more than one.

md95065

I think that it really is all part of the same treaty, but there are some special provisions regarding things like academic researchers on short term visas like the J1 which go beyond the normal "no double taxation" provisions and actually do make certain earnings tax exempt - provided that all of the conditions are met.

One of the very important conditions is that you spend less than 2 years in the US. Stay longer than 2 years and you owe taxes on everything,

caleyjag

OK, now things are starting to get complicated. So, I do NOT have a W2 form. I have a 1042-S instead. I don't know what that means in this case. I contacted an online visa service for a quote, and they sent me this:

"Off-hand, based on your signature block, it appears that you DO qualify for this exemption, in which case NO tax return is required unless the university withheld income taxes by mistake, in which case you would file Form 1040NR-EZ to claim a refund. "

OK, so no taxes have been withheld by mistake, so that sounds like I am free and clear. Is this advice correct? Do I still need to fill form 8843?



Digging around on my university website (you guys were right, the HR staff refused to help) revealed this:

http://iss.washington.edu/resources/...form+to+use%3F

which suggest I have to fill in the forms as you guys have said.

Also, what are the likely repercussions of being a few months late with all of this?

caleyjag

Yup, I'm on 20A. My panic is that somehow, having failed to fill in my return on time suddenly waives my right to invoke the treaty. Is there a chance that this is the case?

I tried using Cintax but it did not seem to be able to invoke the treaty properly and told me I owe the US $3000 or so, which I hope is not the case.

I'm currently on hold with the IRS phoneline to see what to do.

I can't figure out if I am a resident or non-resident alien.

I have been here for long enough to be a resident alien judging by the simple algorithm on most of the sites I have seen, however I am under the impression treaty 20A forces my status into non-resident alien if I stay here for under two years.

Does this sound correct?

Bill_S

You are probably looking at the "substantial presence test". Days spent in J1 status don't count though. From Pub 519:

Exempt individual. Do not count days for which you are an exempt individual. The term “exempt individual” does not refer to someone exempt from U.S. tax, but to anyone in the following categories.

*

An individual temporarily present in the United States as a foreign government-related individual.
*

A teacher or trainee temporarily present in the United States under a “J” or “Q” visa, who substantially complies with the requirements of the visa.
*

A student temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa, who substantially complies with the requirements of the visa.
*

A professional athlete temporarily in the United States to compete in a charitable sports event.



BTW, there's no need to panic. You aren't the first J1 who didn't file.

caleyjag

OK, just spent the last hour on the phone with the IRS.

I'm a non-resident alien, exempt under 20A.

I have to submit form 1040NR-EZ, and that's it.

There will apparently by no fines or complications for being late, since I don't owe any tax.

I am off to the pub to celebrate. Thanks everyone for all your help!

md95065

Yes - technically you are liable for a late filing penalty, but since that is calculated (sorry, "figured") as a percentage of your tax liability it will end up being zero if your tax liability is also zero.