IRS Tax Tips for First-Time Indian
Welcome to your first U.S. tax season! If you arrived in the U.S. during 2025 on an F-1, H-1B, or L-1 visa, you are likely feeling overwhelmed by the alphabet soup of forms (W-2, 1040, 8843).
For 2026, the One Big Beautiful Bill (OBBB) has introduced higher deductions, but it also means first-time filers must be more diligent to avoid “simple” mistakes that trigger audits. Here are five essential tips for Indian citizens filing for the first time.
1. Get Your ID Sorted (SSN vs. ITIN)
You cannot file a tax return without a Taxpayer Identification Number.
- If you have a job: You should have a Social Security Number (SSN). Use this for your filing.
- If you don’t have a job (or are a dependent): You need an Individual Taxpayer Identification Number (ITIN).
- The Rookie Mistake: Do not wait until April to apply for an ITIN. The process can take 7–11 weeks, and you must submit a Form W-7 alongside your tax return.
2. Don’t Fall for the “TurboTax Trap”
Many first-time Indian filers use popular retail software like TurboTax or H&R Block Online.
- The Danger: Most of these platforms are designed for U.S. Residents. If you are a student (F-1) or a new H-1B holder who has been in the U.S. for less than 183 days, you are likely a Non-Resident Alien.
- The Correct Form: Non-residents must file Form 1040-NR. Filing a standard 1040 when you are a non-resident is considered a “fraudulent” return by the IRS and can jeopardize your future Green Card or H-1B renewal.
3. Claim the “Indian Student” Standard Deduction
Generally, non-resident aliens cannot claim the Standard Deduction. However, Indian students and business apprentices are a special exception.
- Article 21 Advantage: Under the U.S.-India Tax Treaty, you can claim a standard deduction of $15,750 for the 2025 tax year.
- How to get it: You must specifically invoke the treaty on your 1040-NR and attach Schedule OI. This one step can save you over $1,500 in taxes.
4. Understand “Exempt” vs. “Non-Exempt” Income
As a first-time filer, you might receive a Form 1042-S instead of a W-2.
- W-2: Reports your standard salary.
- 1042-S: Reports income that is potentially exempt under a treaty (like a scholarship or specialized research grant).
- Interest Income: Most first-time filers do not realize that U.S. bank interest is usually tax-free for non-residents. You do not need to report the $5.00 your Chase or Bank of America account earned, provided you submitted a Form W-8BEN to the bank.
5. The “Zero Income” Filing Requirement
Even if you didn’t work a single day in 2025, if you were in the U.S. on an F, J, M, or Q visa, you must file.
- Form 8843: This is a simple informational form that explains why you are exempt from the Substantial Presence Test.
- The Penalty: Failing to file Form 8843 can lead to the IRS “counting” your days in the U.S., which could accidentally turn you into a tax resident and make your Indian bank accounts subject to U.S. tax.
How KKCA Secures Your Status
Your first tax return is the “baseline” for your entire immigration history. At KKCA, we ensure your first impression with the IRS is perfect:
- Visa-Specific Filing: We specialize in transitioning clients from 1040-NR (Student/New Arrival) to 1040 (Resident).
- ITIN Assistance: We help your dependents obtain ITINs so you can claim the $2,200 Child Tax Credit (now expanded for 2026).
- Treaty Verification: We ensure Article 21 is applied correctly to maximize your refund.
Contact
Looking for personalized tax services about your specific tax situation, please contact us. We are here to help you with your specific tax matters.
Disclaimer
This blog is intended for informational purposes only and does not constitute legal or tax advice. Please consult a qualified U.S. CPA or tax attorney for guidance specific to your situation.