Where newcomers lose money
These are the mistakes and scams that come up most for people new to the U.S. money system. Each one links to the official rule, so you can check it yourself.
Taxes
Social Security tax taken from a student paycheck
Nonresident F-1, J-1 and M-1 students usually don't owe Social Security or Medicare tax on campus jobs, CPT or OPT, but payroll often withholds it anyway.
Does it apply to you? Look at boxes 4 and 6 on your W-2. If they aren't empty, check whether you're exempt.
What to do: Ask your employer to refund it first. If they won't, file IRS Form 843 with Form 8316.
Check your W-2Source: IRS: Foreign student liability for Social Security and Medicare taxes
Filing a resident return when you're a nonresident
Mainstream tax software files Form 1040, the resident return. Nonresidents file Form 1040-NR. Filing the wrong one can claim credits you don't qualify for and may cause problems with future visa applications.
Does it apply to you? Find out whether you're a resident or nonresident for tax before you file.
What to do: If you already filed the wrong return, file an amended return (Form 1040-X) as a nonresident. Your school may offer nonresident tax software.
Check your residencySource: IRS Publication 519, U.S. Tax Guide for Aliens
Skipping Form 8843 because you had no income
Students, teachers and trainees who exclude days from the presence test generally must file Form 8843, even with no U.S. income at all.
Does it apply to you? You're on F, J, M or Q status and were in the U.S. any part of the year.
What to do: File Form 8843 for each year, by itself if you had no income, or attached to your 1040-NR.
Missing a tax treaty benefit
The U.S. has tax treaties with many countries that can exempt some student or researcher income. They aren't applied automatically, and some must be disclosed on Form 8833, with a $1,000 penalty for not filing it when required.
Does it apply to you? Look up your home country in IRS Publication 901.
What to do: Ask your employer or school how to claim the treaty on withholding, and claim it on your return.
Contributing to a Roth IRA with income that doesn't count
You can only contribute up to your taxable compensation. Wages exempt under a tax treaty don't count, and income limits cut the amount for higher earners.
Does it apply to you? Check your taxable U.S. wages and income for the year.
What to do: Use the calculator before you contribute, and fix excess contributions before the tax deadline.
Banking and credit
Not reporting bank accounts back home
Once you're a U.S. tax resident, you're a U.S. person for this rule. If your foreign accounts add up to more than $10,000 at any point in the year, you must file an FBAR (FinCEN Form 114). Penalties for not filing can be large.
Does it apply to you? Add up the highest balance of every account you have outside the U.S. during the year, including savings and accounts you can sign on.
What to do: File FinCEN Form 114 online through BSA E-Filing. It's due April 15, with an automatic extension to October 15.
Source: IRS: Report of Foreign Bank and Financial Accounts (FBAR)
Starting with no credit history
Your credit history from home doesn't transfer. With no U.S. history you can face rejected rental applications, bigger deposits and higher insurance rates.
Does it apply to you? You've never had a U.S. credit card or loan in your name.
What to do: Start with a secured card or a student card, pay the full balance every month, and keep usage low. Some issuers accept an ITIN instead of an SSN.
Overpaying to send money home
Transfer costs include the fee and a markup on the exchange rate. The UN goal is to bring the cost of sending money below 3%.
Does it apply to you? Compare how much arrives on the other side, not just the fee. Check the provider's rate against the market rate.
What to do: Compare a few licensed providers for your corridor before each large transfer, and keep the receipt.
Scams
Paying a preparer who won't sign your return
Ghost preparers fill out returns, often with fake deductions, then don't sign them and disappear. You're responsible for what's on the return.
Does it apply to you? Warning signs: they won't sign as preparer, want cash only, charge a percentage of your refund, or want the refund sent to their account.
What to do: Check the preparer in the IRS directory, read the whole return before signing, and never sign a blank form. Free help: IRS VITA clinics.
Getting immigration advice from a notario
In the U.S., a notary public can't give legal advice. People advertising as notarios sometimes charge for immigration help they're not allowed to give, or for government forms that are free.
Does it apply to you? Only a licensed attorney or a DOJ-accredited representative can give immigration legal advice. Government forms are always free.
What to do: Never sign a blank form or hand over original documents. Report fraud to the FTC at ftc.gov/complaint.