Got your W2 form? Peter Stears takes us step by step through the (often overwhelming) US tax return process.
You would be forgiven for looking at what forms you need to fill out for your J1 tax returns and losing all faith in humanity, but with time and a little bit of effort you could end up saving yourself hundreds.
You’ve probably seen the Irish Times, Irish Independent and a bunch of other organisations writing articles on how to receive hundreds of dollars of your tax back through taxback.com and other agencies.
While these agencies have their merits, you can file your own taxes, saving yourself at least $90 plus two handling fees each for your federal and state tax, which you will be charged if you go through taxback.com. Even if you are only receiving a small refund, you will get charged a reduced fee, but a fee nonetheless.
To file your J1 tax return, the first thing you need is time. Give yourself at least four hours to sit down, read the instructions carefully and ensure you are carrying out the correct process.
Taxes in the United States are split into federal, state and local taxes. Your federal tax returns are sent to the Internal Revenue Service and your state and local tax return is sent to a state tax processing centre, the address of which can be found on the state’s government website. If you did your J1 in New York City for example, your local tax is known as city tax, and is separate to your state tax.
The amount of money you earned, the amount of federal tax, state tax, and city/local tax, that was withheld from your pay check, as well as your social security number is all found on a W2 form - which all employers in the US have to send to their employees by February 1st.
If you haven’t received your W2 form by now, contact your employer and request your W2 form; you cannot file any tax returns until you have this document. You should receive multiple copies of it from your employer when you do get it.
Once you have your W2 form you can begin filing your tax returns. When it comes to tax purposes in the US, a J1 student is classed as a non-resident alien. The form a J1 student should fill out for their federal tax returns is 1040NR-EZ form can be found here and is to be filed alongside a copy of their W2 form.
The 1040NR-EZ form is specifically for J1 students who have no dependents, cannot be claimed as a dependent on another person’s tax return, your only income is from salaries, wages, tips, tax refunds, scholarship grants etc., and your only deductions were state and local taxes. This may seem like a lot of information but as long as you weren’t trading on the stock exchange and don’t have a child in the US then this is the form for you.
The 1040NR-EZ is easy to fill out, just take your time and follow the instructions here. A lot of the boxes won’t apply to you and majority of the information you’ll be inputting is your personal information, your earnings, the amount of tax you paid, and the amount you are to be refunded.
To file your state and local tax forms go onto that state's government website or search for them in Google. If you worked in New York for example you will find your tax return forms here or if you worked in California you will find your forms here.
Make sure to select the non-resident form, and if you’re not sure, click into the form itself and it will give details as to who that specific form is for. State and local tax return forms can often be trickier than filing the 1040NR-EZ form, often requiring multiple forms to accompany your return.
For example, if you worked in New York and are filing your tax return, you need to first fill out the IT-203 non-resident tax return form, the IT-203-B form section B, which details where you lived in New York, and the IT-2 form which is basically a copy of your W2 form.
Don’t worry about figuring out which extra documents you need to fill out for your state; once you find the state and local tax return form for non-residents of the state you worked in, it will detail any other forms required. The accompanying instructions are invaluable and you should read the instructions for every line you fill in on your tax return.
Filing your own J1 tax return is not easy, and at times it can all seem overwhelming, but nothing is impossible and it can be done. As long you have enough patience and read the instructions thoroughly it will be no problem to you. You have to file a tax return regardless of your level of income, but whether you’re owed a massive refund or a small one, you are still saving yourself money and keeping all of your refund if you file your own taxes.