[much_obliged]

J-1 Visa holder from Australia. Need to file a tax return for 2012:

1. Not a student or trainee
2. 35K in 1099 income from multiple sources
3. Present in US from November 2011 to November 2012

Questions:

1. Do I file resident or nonresident return?
2. Do I report income on Schedule C?
3. Am I subject to FICA/SE Tax?

[AtlantaTaxExpert]

J-1 visa holders are normally either:
- students
- trainees or interns
- scholars or teachers or researchers.

You stated that you were NOT a student or trainee, so that leaves scholar/teacher/researcher. However, the third category is normally NOT employed as an independent contractor. It is NOT unprecedented (I have prepared several such returns over the years), but it IS unusual.

That said, you would file Form 1040NR (non-resent return) with Schedule C. You are NOT liable for self-employment taxes for 2011 or 2012 under U.S. tax law. Since the duration of your J-1 tour was only ONE year, you should also be able to claim daily living expenses (provided the U.S.-Australia Tax Treaty does NOT have a restriction on claiming these expenses).

It is likely you will need to file tax returns for BOTH 2011 and 2012 (depending on HOW MUCH you earned in 2011).

If you need professional help filing, this IS what I do! Please email me at the email address in my profile.

[much_obliged]

Thanks for the reply. I was in the states on a "Summer Work/Travel" Program" and was issued the J-1 in Australia. From what I've read, I thought the exemption from SE and the 2 or 5 year non-res status was only for students and scholars. Does it also apply to "work/travel" visa's?

Below is a description of the program for which I was issued the J-1:

"Working Holiday USA participants are exchange visitors to the United States participating in a program of Camp Counselors USA. Camp Counselors USA is designated by the United States State Department as a sponsor of Exchange Visitors Programs. Working Holiday USA participants are entering the United States on Program No. P-4-11857 of which Camp Counselors USA is the sponsor. This is a J-1 visa program designated for Summer/Work Travel (see Federal Register, “Regulations Governing Exchange Visitor Programs”, Vol. 58, No. 52, Subpart G, Part 514.8).


The Summer/Work Travel program is designed to achieve the educational objectives of international exchange. Students are immersed during their summer vacations in the daily life of the host country through temporary employment opportunities. Working Holiday USA participants are legal to work in the USA up to 12 months, or as specified on their DS2019 form. After the work visa is completed, each student is eligible for an additional one month grace period, allocated for travel within the US."

Thanks again for your help!

J-1 visa holders are normally either:
- students
- trainees or interns
- scholars or teachers or researchers.

You stated that you were NOT a student or trainee, so that leaves scholar/teacher/researcher. However, the third category is normally NOT employed as an independent contractor. It is NOT unprecedented (I have prepared several such returns over the years), but it IS unusual.

That said, you would file Form 1040NR (non-resent return) with Schedule C. You are NOT liable for self-employment taxes for 2011 or 2012 under U.S. tax law. Since the duration of your J-1 tour was only ONE year, you should also be able to claim daily living expenses (provided the U.S.-Australia Tax Treaty does NOT have a restriction on claiming these expenses).

It is likely you will need to file tax returns for BOTH 2011 and 2012 (depending on HOW MUCH you earned in 2011).

If you need professional help filing, this IS what I do! Please email me at the email address in my profile.

[AtlantaTaxExpert]

The "Summer Work/Travel Program" are considered to be interns and thus are EXEMPT from FICA (Social Security and Medicare) and/or self-employment taxes.

File Forms 1040NR with Schedule C plus Form 8843.

[much_obliged]

Brilliant! Thank you!

[AtlantaTaxExpert]

Glad to help!

[much_obliged]

So I tallied up my daily living expenses for my year in the states and it came to $17,000! Can I really deduct these? My net schedule C income was only $8000. Would I claim these on the sched c as well? I didn't see anything in the US/AUS treaty mentioning daily living expenses one way or the other.

I didn't see anything in the US/AUS treaty that mentioned daily living expenses one way or the other.

Thanks again!

[AtlantaTaxExpert]

The daily living expenses provision is NOT in the treaty; it is in U.S. tax law for jobs deemed temporary in nature.