The U.S. does not tax nonresident aliens' foreign-source income; income source needs to be determined before filing
A nonresident student or scholar's income is "effectively connected" if they are studying, teaching, or doing research, and is reported on Form 1040NR or 1040NR-EZ
Some tax treaties provide for a limited exemption from tax for wages earned while temporarily studying in the U.S.
Income received from interest, dividends, or gambling is not "effectively connected" and must be reported
Income in the form of a scholarship or fellowship is treated in one of three ways:
Section 117 exclusion
Exempt by treaty
Taxable
Nonresident students (except students from India) must itemize deductions but are limited in the type of expenses they can deduct
Nonresident students and scholars are subject to 30 percent taxation of U.S. capital gains, unless a tax treaty allows a lower rate
