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Frequently Asked Questions

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Ans. Probably not. If you make less than $200,000 there’s a 1 in 98 chance you could be audited, according to 2011 figures. This number might even go down in 2013, with I.R.S. budget cuts due to the sequester.

You’re more likely to get audited if you do something that the I.R.S. considers evidence that you’re trying to game the system, like taking really big deductions on a very low income or putting in nice, neat round numbers that all end in 00. Learn the most common audit triggers and how to avoid them.

But if you do get audited, it might not be so bad. Most likely, it will be conducted by mail (only about one in five audits involve your showing up in person or an auditor showing up to your business or home), and the I.R.S. will just ask for back-up documentation. That’s why you should be very organized and keep your documentation for deductions, retirement contributions, HSA distributions and anything else you claim around for several years, in case the I.R.S. asks for proof.

Ans. Yes, you can sometimes settle unpaid taxes for less than you owe. The two most common options are an offer in compromise or a partial payment installment agreement (PPIA). There are strict requirements for both programs, and you have to give the IRS detailed financial information to prove you meet the criteria.

Ans. Every international student is required to file a tax return as a condition of your visa, but not everyone will pay taxes to the American government. International students are entitled to a number of benefits and exemptions, so many will not owe anything. In fact, if you paid too much tax throughout the year, you may be entitled to a refund check.

Ans. Before breaking down what’s changed, let’s back up and explain the basics: Taxpayers are entitled to take a standard tax deduction amount, or they can itemize their deductions individually; they can deduct whichever amount is higher, resulting in a lower tax bill.

Ans. Typically, it takes six to nine months on average for the IRS to respond. Staff, funding, and the time of the year the OIC is submitted all influence the decision process. If more than two months have passed, you should check with the IRS to see how the process is moving along. It is common for the IRS to take up to six months to make a decision.

If the IRS doesn’t respond to you within two years, your offer is automatically approved.

Ans. First and foremost, you will need an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN). If you don’t have one, you’ll need to apply for one in conjunction with filing your tax return by filling out a W-7. Depending upon whether you had US source income, you may also need W-2’s, 1042-S’s, and 1099’s, which will be mailed to you from the university and your employer. For more on these documents, see our Student Tax Return page.

Ans. You are required to file federal and state income tax returns if your income is above a certain level. This amount varies depending on your filing status, age and the type of income you receive.

There are instances when you may want to file a tax return even though you are not required to do so. You may want to file to get money back if federal/state income taxes were withheld from your pay. Also you may qualify for an Earned Income Tax Credit (EITC), if you worked, but did not earn a lot of money. EITC is a refundable tax credit which means that you could quality for a tax refund.

If you are not sure if you are required to or should file, make an appointment and we will figure it out together. We will not charge you for the consultation.

Ans. If you earned wages from a job in the United States, received scholarship money from an American organization, or made interest on money in an American bank account, you made US source income. The full list of potential income sources can be found on the IRS website.

Ans. International students on F, J, M, or Q visas are considered “exempt individuals,” which means you are excused from the Substantial Presence Test for the first 5 years you are in the US if you are an international student or the first 2 years if you are a scholar. After this period you will be subject to the Substantial Presence Test, which is used to determine if someone was in the US long enough to be considered a resident.

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"Opting for Sadh & Associates, you’ll get peace of mind knowing that your taxes are done right! Appreciate their patience while explaining my questions thoroughly! Highly recommended!"

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