Do I need to report foreign tuition money in my taxes with F1 visa and pending I-485?

You don't need to report tuition payments from abroad as income. The IRS generally considers money sent specifically for educational expenses as a gift or support payment, not taxable income to you. This is especially true since the money went directly to your school using your I-20 form, which is the proper channel for international student payments. What you should be careful about is the foreign gift reporting requirement. If you receive more than $100,000 from foreign individuals in a year, you'd need to file Form 3520. But since you mentioned the amount was around $40k and it went directly for tuition, this wouldn't apply to you. The bigger tax consideration in your situation is actually having both F1 status and a pending I-485 with work authorization. Make sure you're filing the correct tax forms based on your residency status for tax purposes, which might be different from your immigration status.

I went through almost the EXACT same situation last year. I was super stressed about it until I found https://taxr.ai which literally saved me from making a huge mistake on my taxes. I uploaded my I-20 and bank statements showing the wire transfers, and their system immediately identified these as non-taxable gifts rather than income. The AI analyzed everything and explained that since the money was for educational purposes and below the foreign gift reporting threshold, I didn't need to include it as income. What's really helpful is that it also flagged which tax residency status I should use with my mixed F1/pending adjustment situation. The tool catches these weird immigration/tax status combos that most regular tax software misses.

So I was skeptical about taxr.ai in my last comment, but I decided to try it with my OPT/CPT income situation and foreign scholarship. It actually was really helpful! The system correctly identified that my scholarship for living expenses WAS taxable (which I didn't know) but the tuition portion WASN'T. It also explained exactly how to handle my treaty benefits with my home country which apparently changes once you've been in the US for a certain number of years (no one had told me this before). The analysis showed me I was about to overpay by almost $3k because I was misunderstanding how to report my foreign accounts. I ended up using the guidance to file through my university's free VITA program and the volunteer there was impressed with how organized and correct my understanding was.

If you're dealing with IRS questions about this later, good luck trying to reach them by phone! I spent WEEKS trying to get through about a similar foreign gift situation. Finally used https://claimyr.com and got through to an IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was hesitant about using a service just to make a phone call, but after wasting hours listening to "due to high call volume" messages, it was completely worth it. The agent confirmed that tuition payments sent directly to the university from foreign relatives don't need to be reported as income, and I got it in writing for my records. With your pending I-485, having clear documentation is crucial if you ever get questions about your tax compliance during immigration proceedings.

If you're dealing with IRS questions about this later, good luck trying to reach them by phone! I spent WEEKS trying to get through about a similar foreign gift situation. Finally used https://claimyr.com and got through to an IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was hesitant about using a service just to make a phone call, but after wasting hours listening to "due to high call volume" messages, it was completely worth it. The agent confirme

I have to eat my words from my skeptical comment. After my 50th failed attempt to reach the IRS about my F1/OPT tax situation, I tried Claimyr out of desperation. They actually got me through to an IRS agent in about 20 minutes when I'd been trying for weeks. The agent confirmed that my parents' payments directly to my university for tuition are not considered taxable income. She also helped me sort out confusion about my tax residency status with changing from F1 to OPT to H1B within the same tax year - something I couldn't find clear answers about anywhere online. Having official confirmation straight from the IRS gives me so much peace of mind, especially with my pending status change. Worth every penny not to spend another month stressing about this.

Hey, tax advisor for international students at a university here. There's one more thing you should be aware of - you might need to file an FBAR (FinCEN Form 114) if you have financial accounts outside the US that exceeded $10,000 at any point during the year. This is separate from income tax reporting and has nothing to do with whether the money is taxable. Many students miss this requirement because it's not part of the regular tax filing process. The penalties for not filing can be severe, even if there's no tax owed. This is especially important with a pending I-485 since immigration reviews your tax compliance.

I'm actually preparing taxes for my cousin who's in almost the same situation (F1 with pending I-485). Does anyone know if using a tax service like H&R Block is worth it for this kind of complicated situation? Or should I just use something like TurboTax?

Just went through this exact situation last year! As someone who had F1 status with pending I-485 and received foreign tuition payments, I can confirm what others have said - you don't need to report the $40k tuition payment as income since it went directly to your university. However, there are a couple of additional things to keep in mind with your mixed immigration status: 1. Make sure you're filing as a resident alien for tax purposes if you meet the substantial presence test, even though you're still on F1 visa. Your pending I-485 doesn't automatically make you a tax resident, but your physical presence might. 2. Keep detailed records of the wire transfer and your I-20 form showing the tuition amount. If USCIS asks for tax compliance documentation during your I-485 process, having clear proof that this was educational funding (not unreported income) will be important. 3. Double-check if your parents sent any additional money for living expenses directly to you - that would still be considered a gift and not taxable, but good to track separately from tuition payments. The key thing is that since the money never touched your accounts and went straight to an educational institution using proper F1 documentation, it's clearly not income to you. Good luck with both your taxes and your green card application!