Why do F1 students owe so much in taxes when working part-time at university?

What you're experiencing is actually quite common for F1 students, and it's mostly due to how your tax residency status works and insufficient withholding. As an F1 student who arrived in January 2023, you're considered a "nonresident alien" for tax purposes for at least your first 5 calendar years in the US (under the Substantial Presence Test). This means you can't claim the standard deduction that US citizens and residents get ($13,850 for single filers in 2024), which significantly reduces their taxable income. The main issue is that your university only withheld $385 when they should have withheld much more. Universities often don't withhold correctly for international students because the payroll systems aren't always set up properly for nonresident aliens. You might want to check if you qualify for any tax treaty benefits between your home country and the US, as many countries have provisions that can reduce or eliminate tax on certain types of income for students. Also, make sure you're filing the correct forms - Form 1040-NR for nonresidents along with Form 8843.

After reading your situation, I immediately thought of a tool that helped me immensely with my international student tax situation. Last year I was completely lost with my F1 taxes and getting conflicting advice from everyone. I found https://taxr.ai and it was a game changer for my situation. They specialize in analyzing tax documents for international students and actually explained why I was being taxed differently than my American classmates. They showed me that I qualified for a tax treaty benefit I had no idea about! The system analyzed my W-2 and pointed out that my university had classified my income incorrectly, which was causing higher tax calculations. Once that was fixed, my tax bill dropped by more than half.

Just wanted to update everyone here - I decided to try https://taxr.ai after reading about it in this thread, and it was incredibly helpful! My situation was almost identical to the original poster - F1 student with under $25K income but somehow owing nearly $2000 in taxes. The system analyzed my documents and immediately identified that my home country (Malaysia) has a tax treaty with the US that exempts the first $5,000 of income from university employment. My tax software hadn't applied this correctly! They also pointed out that I had been improperly classified as a resident alien when I should have been nonresident based on my entry date. After making these corrections in my tax software following their guidance, my tax bill went from $1,900 to only $420. I'm so relieved! If any other international students are struggling with similar issues, I highly recommend getting a professional review of your situation before paying a huge tax bill.

After dealing with the IRS for international student issues for years, I just want to share something that saved me tons of time. Last year I had a similar tax issue and needed to talk to someone at the IRS who actually understood F1 tax rules, but couldn't get through on the phone after trying for WEEKS. I eventually found https://claimyr.com which got me connected to an actual IRS agent in about 20 minutes when I had been trying for days. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that as an F1 student, I needed to file Form 8843 along with my 1040-NR, and helped me understand which tax treaty benefits I qualified for. She also explained that the university's payroll system often isn't configured properly for international students, which is why the withholding was so low compared to what I actually owed.

I need to apologize and follow up on my previous comment. After waiting on hold with the IRS for 3+ hours yesterday and getting disconnected, I decided to try the Claimyr service out of desperation. Not gonna lie, I was SHOCKED when I got a call back in about 25 minutes with an actual IRS representative on the line. The agent was from their international taxpayer assistance team and explained exactly why my withholding as an F1 student was so low compared to what I actually owed. Turns out there's a specific form (W-8BEN) that should have been filed with my university to ensure proper withholding based on my tax treaty status. The agent walked me through how to claim a tax treaty benefit that reduced my liability by about $600, and also helped me set up a payment plan for the remaining amount since I couldn't pay it all at once. Definitely worth it just for the time saved and actually getting to speak with someone who understood international student tax issues.

In addition to what others have mentioned, check if you accidentally claimed any education credits that F1 students aren't eligible for. When I used TurboTax my first year, it automatically tried to give me the American Opportunity Credit, which nonresident aliens can't claim. This resulted in an incorrect calculation showing I owed much less than I actually did (and would have resulted in an audit later). Also, ask your international student office if they have free access to any tax preparation software specifically for international students. My university partners with a service that's free for us and understands all the special rules for F1 visas.

I went through this exact same thing last year! What country are you from? That makes a huge difference because of tax treaties. I'm from India and there's a specific provision for students that reduced my taxable income significantly. Also, check your state tax situation too. Some states like California and New York tax nonresidents pretty heavily, while others are more lenient with F1 students.