TAX TREATIES

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TAX TREATIES

• Sara Marcotte
• Accountant
• Accounting Services

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United States Income Tax

• A tax that the government imposes on income
  earned by individuals.
• Income tax is a key source of funds that the U.S.
  government uses to fund its activities and serve
  the public.
• Income tax is withheld from wages.
• Can be referred to as federal withholdings

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What is a Tax Treaty?

• Formal written agreement between countries
• U.S. has tax treaties with a number of countries
• Residents of foreign countries are taxed at a
  reduced income tax rate or exempt from U.S. taxes
  on certain types of income

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Tax Treaties -Continued

• Not all countries have tax treaties
• Not all tax treaties are the same. Each country
  has their own agreement with the United States.

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Tax Treaties Student Wages

• Some countries have tax treaties with the United
  States that exempt student wages from income tax.
• Certain conditions need to be met in order for
  student wages to be exempt
• Length of time in the United States
• Amount of Earnings
• http//www.admin.mtu.edu/acct/dept/tax/nrstudentwa
  ges.htm

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Form 8233

• Qualify for tax treaty? Fill out form 8233
• Form 8233 is a form that exempts your wages from
  income tax. There will be no withholdings from
  the wages you earn.
• Must be filled out annually.
• http//www.admin.mtu.edu/acct/dept/tax/8233info.ht
  m

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What if 8233 is not completed?

• When you file tax return at the end of the year
  you can be refunded the income tax that was
  withheld.

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Helpful Websites

• Tax Treaties http//www.irs.gov/businesses/inter
  national/article/0,,id96739,00.html
• Summary of Tax Treaties
• http//www.irs.gov/pub/irs-pdf/p901.pdf
• Student Wages Form 8233
• http//www.admin.mtu.edu/acct/dept/tax/nrstudentwa
  ges.htm

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QUESTIONS?

• SEE ME!
• Sara Marcotte
• sjmarcot_at_mtu.edu
• 487-2449