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Individual tax filing �for NYLESA members

Jooyoung Kim, Treasurer 2021-22

Presented on 1/13/22

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Disclaimer

The information contained in this slides is for general information purposes only. Any reliance you place on such information is therefore at your own risk.
This information is subject to 2021 income tax filing for individuals. For other tax season, please make a further research on your own.
This presentation covers most of FAQs collected from our members (thank you!) but still limited due to the nature of the topic – highly individual-dependent and broad / specific tax law…

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Table of contents

Why should we file the income tax?
Who should file income tax?
Filing status of G4 visa holder
How to calculate my tax?
How to file taxes?
When is the tax filing deadline?

Individual tax filing

for NYLESA members

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Why should we file the income tax?

To pay for income tax
To request for refund for withholding tax (*)
You need a tax transcript when renew your work permit!

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Withholding tax

A withholding tax is the amount an employer withholds from an employee’s wages and pays directly to the government
If you don’t pay your taxes through withholding, or don’t pay enough tax that way, you may have to pay estimate tax. (for self-employed)

Federal, State, Local, Municipal taxes
FICA (Federal Insurance Contributions Act) – Social Security, Medicare
Others

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Who should file the income tax?

Anyone who earned US source income (*).
Unlike US tax residents who have the income threshold of being exempted from tax return, US tax non-residents do not have the exemption.

IRS

The Internal Revenue Service is the nation's tax collection agency and administers the Internal Revenue Code enacted by Congress.

Individual tax filing

for NYLESA members

https://www.irs.gov/

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Filing Status of G4 visa holder

Full-Year Resident or Resident Alien (Form 1040)

Taxed on worldwide income
Report globally owned all foreign financial accounts (FBAR, FATCA)
Eligible for all elections, deductions and credits
Eligible for stimulus checks

Full-Year Nonresident or Nonresident Alien (Form 1040 NR)

Taxed only on US source income
No FBAR, FATCA reporting is required
Limited elections, deductions and credits
Not eligible for stimulus checks

Dual-Status Resident (Form 1040/1040 NR)

Combination of Resident and Nonresident filings

Individual tax filing

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Filing Status of G4 visa holder

Full-Year Resident or Resident Alien (Form 1040)

Taxed on worldwide income
Report globally owned all foreign financial accounts (FBAR, FATCA)
Eligible for all elections, deductions and credits
Eligible for stimulus checks

Full-Year Nonresident or Nonresident Alien (Form 1040 NR)

Taxed only on US source income
No FBAR, FATCA reporting is required
Limited elections, deductions and credits
Not eligible for stimulus checks

Dual-Status Resident (Form 1040/1040 NR)

Combination of Resident and Nonresident filings

Individual tax filing

for NYLESA members

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Economic Impact Payments to Individuals

Eligible individuals : U.S. Citizens, Green Card Holders, and Resident Aliens that have a SSN valid for employment.

(This includes individuals living outside of the U.S.)

Ineligible individuals : Non-Resident Aliens and individuals residing in the U.S. on certain Visas that exempt them from the Substantial Presence Test (e.g. G4, F1, and J1 Visas)

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Locally employed eligible dependent family members are responsible for the payment of federal, state, local or municipal taxes on income received
Locally employed eligible dependent family members must annually file with the IRS Form 1040NR

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Tax Treatments

	Resident	Non-resident
Available Filing Status / Tax Rates
Single	Y	Y
Married Filing Joint	Y	N
Married Filing Separate	Y	Y
Head of Household	Y	N
Personal Exemptions
Taxpayer	Y	Y
Spouse	Y	N
Dependents	Y	N
Available Deductions
Standard	Y	N
Itemized	Y	Y
FBAR, FATCA	Y	N

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How to calculate my tax?

Taxable income

= Income – Deduction

Tax

= Taxable income x tax rate (%)

Total tax (tax due or refund)

= Tax – tax credit – withholdings

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Incomes

Effectively Connected Income

– Wage

Not-Effectively Connected Income

– Interest, Dividend, Capital Gain etc.

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Business Income for self-employment

Schedule C : Profit or Loss from business (sole proprietorship)
Net profit = Gross income – Expenses
Expense deducted on Sch C

Wage for employees, depreciation, interests, property taxes on business
Business meal (50%)
Gift expense (up to $25 per person)

Expenses not deducted on Sch C

- Wage for taxpayer, loan payment, State/Local tax payment, Self-employed tax

Individual tax filing

for NYLESA members

Q: Self-employed NR don’t have to pay self-employment tax?

A: In general, yes, NR aliens are not liable to pay self-employment tax.

Note: In spite of the general rules mentioned above, self-employment tax may be imposed on a nonresident alien under the terms of an international social security agreement (Totalization Agreements). If you're a self-employed nonresident alien living in the United States, you must pay SE tax if an international social security agreement in effect determines that you're covered under the U.S. social security system. If you have questions about international social security agreements, or to see if any additional agreements have been entered into, you can visit the Social Security Administration's (SSA) International Programs website. If your self-employment income is subject to SE tax, complete Schedule SE and file it with your Form 1040-NR, U.S. Nonresident Alien Income Tax Return

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Standard Deduction

Tax residents only
Standard deduction

For single or married filing separately is $12,550
For married filing jointly is $25,100

This amount becomes income tax filing threshold.

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Itemized Deduction

Tax residents / Tax non-residents
Deductible items

State and local income tax
Sales tax
Real estate tax
Personal property tax
Mortgage interest
Disaster losses from federally declared disaster
Gifts to charity
Medical and dental expenses

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QBI (Qualified Business Income) Deduction

Tax residents / Tax non-residents
US sourced ordinary income from Self-employed, S-Corp or Partnership
No wage, dividend, interest, capital gain
20% of QBI is deductible

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Tax Brackets, 2021

https://www.forbes.com/advisor/taxes/taxes-federal-income-tax-bracket/

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Example

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Tax Credit

Child care credit
Elderly or disabled credit
Child tax credit
Earned income tax credit
Foreign tax credit
Education tax credit
And so on..

https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-a-general-information

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How to file taxes?

Hire a tax specialist

Self-filing

E-file is available through IRS or Sprintax (No Turbo tax available for 1040NR)
Paper filing

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When is the tax filing deadline 2022?

January 24 (Mon) - April 18 (Mon), 2022
But you may extend the filing tax returns (not tax payment!)

https://www.irs.gov/newsroom/2022-tax-filing-season-begins-jan-24-irs-outlines-refund-timing-and-what-to-expect-in-advance-of-april-18-tax-deadline

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Reference

Individual tax filing

for NYLESA members

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Reference

Individual tax filing

for NYLESA members