Hi

I am a F1 student from Sri Lanka. I am graduating this December and currently under CPT. Since I am on a STEM degree, I can get OPT for another 29 months after December or apply for H1B.

I am a non resident alien and I want to know about the taxes I have to pay. I know that I dont have to pay FICA(SS and medicare) taxes, but have to pay federal and state. What is the percentage of federal tax for f1 students? is it fixed 10%?

I can apply for H1B after december. But is there an advantage in staying in F1(OPT) status rather than changing to H1B (in terms of paying taxes).

Thank you in advance.
Pradeep

MukatA

On F1/OPT you are exempt from residency for 5-years. You must file non-resident tax return Form 1040NR or 1040NR-EZ and Form 8843. Your income is not subject to FICA taxes but you must pay federal and state income taxes.
The income tax rate is not a fixed rate. It is in slabs. Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

On H1-B, you must pay FICA taxes and you are not exempt. You can file resident tax return and get standard deduction.

orlandian

Thank you for the answer and the link.

In the linked website, what is "personal exemption"? is this same as standard deduction?

Thank you

AtlantaTaxExpert

No, the personal exemption is a set amount for yourself and each person you claim as a dependent. For 2008, it was $3,500. It is $3,600 for 2009.