Can More Favorable Tax Laws for International Students in the U​.​S. be Created?

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Hi, my name is Tyler Russell and I'm an international student from The Bahamas studying accounting at Oral Roberts University in Tulsa Oklahoma. In February 2019, I was faced with the task of filing my taxes. As I sought help to meet the deadline, I quickly realized that there were little to no tax education material available to me as an international student. Also, I realized that there are few self-filing options available to internationals. After recognizing this problem, I set out on a journey to find a solution. While on my journey, I discovered many things.

First, I discovered that most international students are in a foreign country (the U.S.) with no family members, no friends, no financial or emotional support. Second, there are no standard deductions given to international students for any of their returns, federal or state. If they do receive deductions, it’s because their country is participating in a tax treaty. Third, most international students do not have the privilege of receiving federal aid nor can they receive education deductions or credits. They are not allowed to deduct their education fees such as books, room and board, school materials, travel expenses, or any of their other school related expenses. Additionally, these students are not allowed to participate in the American Opportunity Tax Credit (AOTC) nor the Lifetime Learning Credit (LLC) which awards students studying at an accredited university to receive up to $2,500 in tax credits to reduce their tax liability. Furthermore, international students are not allowed to work outside of their University unless their Curriculum Practical Training (CPT) or Optional Practical Training (OPT) is activated. The majority of our students work on campus and receive a minimum wage pay of $7.25 per hour for a total of 10 – 20 hours per week. This is a total of $72.50 – $145 per week. This is barely enough to cover their living expenses in the U.S., yet they are being taxed at a minimum rate of 10% during tax season. 

In my opinion, the U.S. tax laws are highly unfavorable towards international students and I believe that many others would agree. I would like to propose that more favorable federal and state tax laws be created for international students studying legally in America.

Tax Law Suggestions

State Level

  • Provide international students who lived in the state of Oklahoma for more than 7 months with the State’s standard deduction and State credit ($40)
  • Provide a threshold for taxable income for international students

Federal Level

  • Simplify the tax laws for international students. The tax laws for international students in America are confusing. There are different guidelines for a student from Germany than a student from France or India
  • Provide all international students from any country with a standard deduction. Whether that be the full $12,200 deduction or less
  • Provide a threshold for taxable income for international students
  • Provide all international students residing in the U.S., for the purpose of education, with education tax credits. This can be a special credit (refundable or nonrefundable credit)
  • Reduce the amount of tax on miscellaneous income for internationals. Currently, the rate is 30% (this includes a student’s Resident Advisor position on campus) of their income. Can this be reduced to 20 – 25% of their income?
  • Provide more tax treaty benefits or create a standard tax treaty benefit which can be applied to all international students instead of a specific country
  • Provide the option for nonresidents to file a joint return if they are married

I hope that someone in the U.S. government would answer this cry coming from the heart of all international students required to pay taxes on their income.