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US Jobs Act 2018: the implications for J1 Visa holders

The new Tax Cut and Jobs Act voted into law by President Donald Trump’s administration Introduced several major changes for tax refund and tax return regarding the J1 Visa Holders working in the USA under the Work & Travel programme. In our previous article you can find any information regarding the new rules to apply for tax refund; here we’ll explain how the new law affects the tax return for nonresident aliens: why it is a legal obligation, who has to file the tax return and how.

Who must file the USA tax return

If you are any of the following, you must file a return:

  • A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during the year.
  • A nonresident alien individual who is not engaged in a trade or business in the United States and has U.S. income on which the tax liability was not satisfied by the withholding of tax at the source.

Implications if you don’t file your USA tax return

As mentioned above, according to the new Jobs Act non-residents such as J1 Visa students are legally obliged to file their tax return.

Failure to file indicates to the IRS (a.k.a International revenue Service) an intent to deceive and may be met with criminal charges. However, some people might fail to file on purpose because they do not have the money to pay their taxes: this is a mistake as the IRS offers extensions and solutions that will help you in paying your taxes. Even if you are penniless, you should still file a tax return. Not filing can potentially result in high dollar fines (up to $25,000).

In addition to the aforementioned penalties, there are other potential losses that apply to unfiled returns. If you file back taxes before the IRS contacts you and it turns out you do not owe the IRS, there will be no penalties for non filing . However, by filing late, you will forfeit any possible refund.

About the timing to file

If you:

  • are an employee or self-employed person and you receive wages or non-employee compensation subject to U.S. income tax withholding
  • have an office or place of business in the United States

you must generally file by the 15th day of the 4th month after your tax year ends. For a person filing using a calendar year this is generally April 15.

If you:

  • are not an employee or self-employed person who receives wages or non-employee compensation subject to U.S. income tax withholding
  • do not have an office or place of business in the United States

you must file by the 15th day of the 6th month after your tax year ends. For a person filing using a calendar year this is generally June 15.

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