Filing Tax Return in the States

Holly-molly. That was confusing.

Just two months after I moved to Philadelphia, I got my first employment ever. With the job comes my first-ever paychecks and also my first-ever tax season (*). I thought I should wrote down something about it.

*: To be fair, I had filed tax return once, but it was in Canada and with the voluntary help from our accounting students. Back then, I virtually did nothing other than signing a few pages -- Kudos to them, those future accountants had also provided stamps.

In the US, you have to file your tax return to three levels of government:

  • Federal

  • State

  • City (rare; usually completed along with state tax return)

The first thing you will want to know is your status. You can be either:

  • nonresident alien,

  • resident alien, or

  • resident.

Generally, if you hold a permanent residency card ("green card") or citizenship in the US, you are considered a resident. Else, if you have stayed for more than half a year (seems does not need to be consecutive) and are not an exempt personnel, you are considered a resident alien. Else, you are a nonresident alien.

F-1 students are exempt personnels for their first 5 years in the US.

I guess the "exempt" in "exempt personnel" means that the personnel enjoys a lower tax rate than residents.

I have a friend who mistook themself as a resident alien for multiple years and got away with filing as one -- seems that IRS does not care too much if you are overpaying your tax dollars.

My university kindly provided coupons for international students at a for-profit tax preparation service. It was also this service that claimed that I did not have to file a tax return for the year 2017, which is odd.

Sadly the coupon covered only the federal package, not the state one. For a state-level tax return, the service asked for a whooping ~USD$25. Seeing that my state tax return turned out to be me owing the state money, and for a mere USD$1, I would regard the service fee as a bad bargain. Therefore, I decided to do my own state tax.

Pennsylvanians can file their state tax returns online for free directly on the governmental website. The website looks prehistoric (read: from the '90s), and the E-Signature User ID login option does not work as expected. I had to log in with my Pennsylvania Photo Card -- I'm so glad that I got one before the tax season.

PA has a Tax Forgiveness program. That basically means the more kids you have and the less you earn, the less tax you are supposed to pay. Guess that's one of the few reasons to have kids at all. For me as a single, unloved student, my earnings in 2017 fell into the basket of <$6,500 gross income. This means that the state will give back my tax dollars pre-deducted (withheld, in more formal terms) from my salary. Free money, anyone?

Another caveat with state tax returns is the "use tax". Basically everything that ain't edible you bought are subject to this tax -- even if you made the purchase outside of Pennsylvania. Being a financially sloppy person myself, I had to sum up my credit card bills and gave an estimate.

As mentioned -- It turned out I owe the Commonwealth of Pennsylvania (full name of this lovely state!) USD$1, for which the Department of Revenue does not care to collect. In other words, I finished my state tax return without the hassle of sending/receiving money. Yay!

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