Most tax problems for newcomers come from a few common mistakes. Each one is easy to avoid once you know it.
Mistake 1: using resident software when you are a nonresident
The IRS decides your tax status with the substantial presence test: a count of your days in the US. F-1, J-1 and M-1 students usually do not count their days for 5 calendar years. A calendar year is January to December, so arriving in August still uses one full year.
While your days do not count, you are usually a nonresident alien for tax and you file Form 1040-NR. Most popular tax software that you see on TV is built for Form 1040 (residents). It may not ask about your visa, and it will happily file the wrong form.
Use the nonresident software your school or employer offers, or a free VITA site that prepares 1040-NR.
If you already filed a 1040 by mistake, you usually fix it with an amended return. Do it soon.
Mistake 2: claiming things nonresidents cannot have
On Form 1040-NR you usually cannot take:
the standard deduction (a fixed amount residents subtract from income). Students from India are an exception under their tax treaty.
education credits for tuition, even if you have a Form 1098-T from your school.
Claiming them gives a bigger refund now and a bill with penalties later.
Mistake 3: Social Security and Medicare taken from exempt pay
FICA is the Social Security and Medicare tax on your pay stub. F-1, J-1 and M-1 students who are nonresidents for tax are usually exempt from FICA on work their visa allows: on-campus jobs, CPT and OPT. Payroll systems often take it anyway.
How to get it back:
Check your pay stub for "Social Security" or "OASDI" and "Medicare".
Ask your employer's payroll office to stop it and refund it. Bring your I-20 or DS-2019 and I-94.
If the employer will not refund it, file Form 843 with Form 8316. Attach your W-2, a copy of your visa, your I-94, your I-20 or DS-2019, and a letter from the employer (or your own statement if you cannot get one).
You generally have 3 years from when you filed your return, or 2 years from when the tax was paid, whichever is later.
Mistake 4: skipping Form 8843
If you are excluding days from the count, you must file Form 8843 every year, even with no income. Each family member on F-2 or J-2 files their own. It can be mailed by itself.
Mistake 5: forgetting the state
Most states have their own income tax return. Some have none. This differs by state; see In your state below.
Mistake 6: missing the deadline or the treaty
With US wages: file by April 15.
No wages with tax withheld: Form 1040-NR and Form 8843 are due June 15.
Your country may have a tax treaty that lowers tax on scholarships or wages. Check it every year. See the tax treaties guide.
Copying a friend who has been here longer. Their status may be different from yours.
Throwing away Form 1042-S or your last pay stub of the year.