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TAX TREATIES

TAX TREATIES. Sara Marcotte Accountant Accounting Services. 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.

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TAX TREATIES

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  1. TAXTREATIES Sara Marcotte Accountant Accounting Services

  2. 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”

  3. 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 exemptfrom U.S. taxes on certain types of income

  4. 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.

  5. 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/nrstudentwages.htm

  6. 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.htm

  7. 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”.

  8. Helpful Websites Tax Treaties: http://www.irs.gov/businesses/international/article/0,,id=96739,00.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/nrstudentwages.htm

  9. QUESTIONS? SEE ME! Sara Marcotte sjmarcot@mtu.edu 487-2449

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