Uncle Sam Wants You to Learn Taxes
It’s March, and the season of Taxes has begun. Uncle Sam wants y’all to be responsible students who file taxes based on their incomes. As the myth goes, this process can get a little tricky (or even cumbersome, who knows?) So we decided to simplify filing taxes for you
$4,900,000,000,000.
$4.90 Trillion, in case you felt overwhelmed counting the zeroes!
This is the total tax that was paid in the USA last year. Yes, 4.90 TRILLION DOLLARS. To understand why this number is relevant and how it impacts you, let us go back a little in history and figure out the concept of Taxes.
This story dates back to somewhere between 3000 BC to 2000 BC in Ancient Egypt, a bright mind thought out loud, “ Hey, you know what would be great? If we all chipped in a little bit of our hard-earned goods to support our community!” And thus, the concept of taxes was born. In fact, early taxation has also been described in the Bible, and since then this concept has been ever-evolving. One can also say that most people keep grumbling about taxes and trying to find ways to avoid them. But let’s face it, taxes are here to stay, so we might as well learn how to file them properly and reap the benefits.
Why are we talking about Taxes today?
Well, the tax season is upon us, and it’s essential to be aware of the rules and regulations regarding taxes in the United States. International students, especially the Indian diaspora, may not be familiar with the taxation system here and can get confused. Many of you may be earning and will have at least one source of income, but there could be a few who would not be earning right now. It is, therefore, necessary for everybody reading this blog to understand the concept of Taxes and their benefits!
Interesting, but what is “Tax Filing” actually about?
By filing Taxes you submit relevant forms to government authorities, with various proofs that include how much you have earned in the past year, how much of this amount has been invested, and how much of that amount has been used up. The deadline for filing taxes in the USA is usually April 15th of each year, and it’s essential to complete this activity before the deadline to avoid any penalties or fines. You can use your SSN or your Social Security Number to file taxes. Another point to note is that these taxes serve various purposes for the government. However, to summarise it in a nutshell – The same taxes that you would have paid are used by the government to improve the existing services and amenities provided and also study the economic growth/progress of the nation.
Am I legally obliged to pay taxes? Or can the government excuse me?
Most students have this doubt in mind and it’s a fair question with a fairly obvious answer…
You see, filing taxes is a legal requirement for anyone who earns an income in the USA. Even if you are an international student and not a US citizen, you are mandated to file taxes if you earn. This can include income from part-time jobs, scholarships, grants, etc. On the brighter side, being a student, you may be eligible for various tax credits and deductions, such as the American Opportunity Tax Credit (AOTC), which can help reduce your tax liability. These tax credits and deductions can help you save money and reduce the total tax you owe
Understood, but how do I file my tax? Can I do it? Can someone do it for me? Will the university help? Or do we have resources online?
While the process may seem daunting at first, the rigour is not as difficult as it looks! There are several resources available to help students file their taxes, all it takes is a Google or a YouTube search to understand the procedure better. Besides, a better way to approach it is to use tax preparation software. The tax preparation software is user-friendly and can help simplify the tax-filing process. If you are well versed with the finances and have a fair share of the administration system, you can also file your taxes by mail. Forms 8843 & 1040NR (depending on your income) would be all you need to complete your tax return! If you still feel confused or underconfident, you can hire a tax professional to help sort this out for you!
So when I file my taxes, do I have to pay anything for the process?
Are taxes applicable on the money we receive from our parents in India / other countries?
Not really. If you have a proper legal status in the United States identifying you as a student on an F-1 visa; you do not have to declare this amount, and you will not be taxed on international income sources.
As students, we hardly earn a lot of money. Why should we then give up a part of it to the government?
Need resources, look no further 👉
✴️You can look up Sprintax and flow through the process with ease!
✴️Not confident about what do to do? Confused with the approach? Just dial up the IRS and speak to them. You can reach them at 1-800-829-1040.
✴️You can also look up the official website of the IRS when in doubt and want official guidelines
