tim_bk

Hi all,

For the past 2+ years I have been working in the US as a research scholar under a J1 visa. I have claimed the tax treaty with my employer, meaning that they have not witheld income taxes. This is reflected on my employer-provided W-2 and 1042-S forms which state that I have $0 taxable income.
However, the tax treaty has retroactively expired since I have overstayed the two years for which it counts. This means that I have to now file a tax return with taxable income. But the W-2 I am required to attach reports $0 taxable income. So what do I attach to support my taxable income? Or does the IRS not care either way when you report more taxable income than on the W-2?

I feel like this is a fairly common situation among research scholars in the US and yet I can't find any information on how to deal with the retroactively expired tax treaty.

Thanks

Nutmegger

My situation is a little different from yours -- and I can't help re the tax treaty -- but as regards the other part of your question, I work as an independent contractor, and not everyone gives me a 1099 stating what they paid me (the European clients certainly don't), but I keep a record of my earnings and report everything on my tax return. You don't have to have a piece of paper from the client/employer saying that you earned something in order to report it. Presumably the money went into your bank account, and that would back up your return?

tim_bk

So do you actually include some snapshot of your records, or do you only need this when they decide to audit?
Thanks for the reply!

Nutmegger

No. I just enter my income (and its sources) and retain the details in my tax file for that year.

robin1234

I have quite a few sources of income that have no W2 or 1099. Foreign bank account interest, foreign pensions, that sort of thing. I simply pay the tax on it, and do not attempt to send in any documentation to back it up. The IRS have never questioned this, they either deposit my check or send me the refund as appropriate. I simply make sure that I have my handwritten records, including exchange rate calculations etc., in case there’s ever a question.

tht

The purpose of the W2, 1099-MISC, 1099-INT is so that’s the IRS knows about income and you don’t “forget@ to declare it. They can match up what the payer sent and check you included it on your return. As others note you can declare anything on the tax return without any documentation. The IRS also have a form you can complete when you don’t have a W2:
https://www.irs.gov/pub/irs-pdf/f4852.pdf

I assume that you have to file (re-file) previous tax returns for the year the now taxable income was earned. Declaring it all in 1 tax year would mean your miss the standard deduction for each year the income was earned and pay a much higher rate.