Why Is Your Residency Status Important?
Knowing your residency statuses will help you to understand whether you should file your taxes as a resident or as a nonresident in the U.S. There are two types of residency statuses for an international student which are resident and nonresident.
Resident (Resident Alien)
A resident is any individual who is permanently residing in the U.S. but does not have citizenship. So, if you have a green card, then your tax filing status will be resident alien. This means that you are considered a resident and can file your taxes the same as a U.S. citizen.
Where Can You File Your Taxes As A Resident?
Residents can file their taxes using any of the known tax software’s in the U.S. such as TurboTax, H&R Block, Tax Slayer, etc.
Nonresident (Nonresident Alien)
A nonresident is any individual who is not a U.S. citizen or U.S. resident. So, if you have an F-1 or M-1 student visa but do not have a green card, then you are considered a nonresident and must file your taxes as a nonresident unless you pass the substantial presence test.
Where Can You File Your Taxes As A Nonresident?
Nonresidents can file their taxes using our well known tax filing software. This is one of the easiest software’s made exclusively for nonresident tax filers.
The Substantial Presence Test (SPT)
The substantial presence test is a test which helps to determine if an individual should be taxed as a resident or a nonresident. Passing this test does not mean that you are a resident of the U.S. This test simply allows a nonresident to file their taxes as a resident without having a green card. If you are a nonresident, who was present in the U.S. for less than 5 years, then you automatically fail this test. Which means that you must file a 1040-NR and/or 8843.
What are the benefits of filing as a resident?
If you file your taxes as a resident, you can claim a U.S. standard deduction which gives you $12,400 worth of deductions and education credits of $2,000-$2,500.
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