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A newbie's tax query - very long but please please help me

A newbie's tax query - very long but please please help me

Old Mar 20th 2009, 9:41 pm
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Question A newbie's tax query - very long but please please help me

Hi everyone I'm so sorry if this has been asked before, I have been here for a little while lurking, but I can't seem to find a straight answer to any of my questions anywhere - I have tried calling the IRS, but they didn't really seem to understand what I meant.

The problem is this.

I am from the UK on a J2 visa and am applying for work through a job agency. They want me to fill in form W-4 for witholding tax (I think?) but I am a non-resident alien. THe instructions on the form says i have to follow the instructions for form 8233 before completing the form and i have read this (and other sources on the web) so am pretty sure that I have filled out the W-4 properly. (The agency didn't have a clue about this other form and about non-res aliens.

My main query is this - as I am from the UK I think I am covered by a tax treaty. Is there a form I need to give to my employer (the agency) to claim the exemption/reduction? I understand from reading online that often NRA's get too much tax witheld and nowhere on that W-4 form does it state that I am from a tax treaty country.

What do I need to give to the agency to minimise my tax liablity?

I really hope someone has managed to read this far and if you have thank you so much!!

One more question for anyone who feels they can also answer - my husband's university (he is the J1 with income solely derived from the UK (paid from the UK in Sterling into a UK bank account) say one thing about the forms we both need to file for our tax returns, however I called the IRS and they say something else (which sounds a lot more complicated and I am concerned that she didnt know what I meant about our situation as she kept having to go and check things) .

Can anyone advise me as to what forms we need to file? I don't think its going to be too complicated as we have no US income and so no deductions or anything, but we just want to get it right.


Thanks so much for your help in advance

Alison
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Old Mar 21st 2009, 1:45 am
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Default Re: A newbie's tax query - very long but please please help me

I haven't got a clue, but will bump this to the top for the others to answer for you.
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Old Mar 21st 2009, 2:00 am
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Default Re: A newbie's tax query - very long but please please help me

Originally Posted by allyballybee View Post
Hi everyone I'm so sorry if this has been asked before, I have been here for a little while lurking, but I can't seem to find a straight answer to any of my questions anywhere - I have tried calling the IRS, but they didn't really seem to understand what I meant.

The problem is this.

I am from the UK on a J2 visa and am applying for work through a job agency. They want me to fill in form W-4 for witholding tax (I think?) but I am a non-resident alien. THe instructions on the form says i have to follow the instructions for form 8233 before completing the form and i have read this (and other sources on the web) so am pretty sure that I have filled out the W-4 properly. (The agency didn't have a clue about this other form and about non-res aliens.

My main query is this - as I am from the UK I think I am covered by a tax treaty. Is there a form I need to give to my employer (the agency) to claim the exemption/reduction? I understand from reading online that often NRA's get too much tax witheld and nowhere on that W-4 form does it state that I am from a tax treaty country.

What do I need to give to the agency to minimise my tax liablity?

I really hope someone has managed to read this far and if you have thank you so much!!

One more question for anyone who feels they can also answer - my husband's university (he is the J1 with income solely derived from the UK (paid from the UK in Sterling into a UK bank account) say one thing about the forms we both need to file for our tax returns, however I called the IRS and they say something else (which sounds a lot more complicated and I am concerned that she didnt know what I meant about our situation as she kept having to go and check things) .

Can anyone advise me as to what forms we need to file? I don't think its going to be too complicated as we have no US income and so no deductions or anything, but we just want to get it right.


Thanks so much for your help in advance

Alison
Firstly, your immigration status (non-resident alien) and your tax status are completely independent. If you meet the Substatial Presence Test (usually if you're in the US for >180 days in a tax year) then you're resident for tax purposes.

Secondly, just because you're from a country with a tax treaty with the US doesn't mean you don't pay taxes here. It means you don't get taxed in both countries on the same income. So you pay taxes like anyone else while you're here, and then don't get taxed on them again in the UK.

There is no "exemption/reduction" for being from the a tax-treaty country. That's why you can't find a form for it.

If you're applying for work here then you are expecting some US income, even if you don't have any yet, right? That's why you need to fill out a W4.

Sounds to me like you've done the right things so far, unless I'm missing something.
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Old Mar 21st 2009, 2:02 am
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Default Re: A newbie's tax query - very long but please please help me

...or just ignore all that crap I just wrote.

Hadn't realized that J1/J2 are exempt from US tax for up to 2 years.

...which means I have nothing useful to contribute, since I have no experience of this situation. Sorry!

This page has advice for various academic visa holders, including J2s, but doesn't seem to clarify what you do other than filling out a W4.

Last edited by dbj1000; Mar 21st 2009 at 2:05 am.
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Old Mar 21st 2009, 2:09 am
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Default Re: A newbie's tax query - very long but please please help me

Hmm. According to a document I downloaded from Yale university, J2 holders are not exempt from Federal tax:
Q. Can my wife on J-2 visa status claim the tax treaty benefit between U.S. and Germany?

A. No, the primary purpose of a J-2 status individual is to accompany the spouse or dependent (i.e., J-1). There are no tax treaties that allow exemption for these individuals; therefore, your wife is subject to withholding federal tax at the standard nonresident alien rates.
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Old Mar 21st 2009, 8:56 pm
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Default Re: A newbie's tax query - very long but please please help me

Thanks for your responses djb. It's all so confusing isn't it?! I do know I have to pay federal tax, but wasn't sure if the treaty meant a differnet rate for the J2 NRA as opposed to other NRA or to other residents.

I think (again not too sure) that I don't have to pay state tax (or the one for medicaid - again not too sure ) Would such an exemption be covered by the W4 or do I have to send in something else for state tax? I can't believe how dense all the official documentation is and how many different forms there are referring to further forms. I would consider myself quite an intelligent person, usually good with legal and financial documents but this is having me going round in circles so sorry if my questions are totally stupid!!

Thanks for your replies so far - if anyone can continue to shed light on this please dont hesitate to add your 2 cents worth!!

Cheers
A
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Old Mar 21st 2009, 9:54 pm
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Default Re: A newbie's tax query - very long but please please help me

Ally, why don't you drop caleyjag a note and ask him to comment on your thread. He's been to this rodeo: http://britishexpats.com/forum/showthread.php?t=586163
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