Check out some similar questions!

ToxicTexan · Feb 9, 2008, 01:23 PM

I came to US in August 2001, on F1 visa.
Filed the 2006 tax retrun as a resident (filed form 1040A).
OPT started on October 5, 2007 (and will end on October 4, 2008).

Started job on November 5, 2007 and FICA taxes are being deducted. Is that right because I have been in the US for more than 5 years ? Or should FICA taxes be deducted only from October 1, 2008 (the date from when I will be on H-1B) ?

I paid the required fee of $282 in 2007 (at the university) ? Can that be deducted as qualified educational expenses ?

Also bought a new car in August 2007 ? Can the sales tax be deducted ?

Thanks a lot for your answers !

AtlantaTaxExpert · Feb 14, 2008, 02:36 PM

You are a resident alien starting on 1 Jan 06, which means you were liable for FCA taxes in 2007.

Yes, the $282 is a qualified educational expenses that should be deductible.

You MAy be ale to deduct the car sales tax IF you do not pay state income tax.

ToxicTexan · Feb 16, 2008, 01:56 PM

Well, I've heard that FICA taxes are not deducted even after 5 years *IF* the person is a full-time student, and is on a scholarship.

I had emailed the HR (at the current job) asking if FICA taxes should be deducted from my paycheck or not. They didn't reply, but I see it online in yesterday's paycheck that they have refunded all the FICA taxes for 2008 (from Jan to current). I called them and they said they will also refund the 2007 FICA taxes (from Nov to Dec), and then issue a new W-2 for 2007.

I read on wikipedia that if the salary is more than 102K then FICA taxes are not deducted. Is that what the reason is ? It just doesn't make any sense... my AGI is not more than 102K for 2007...

AtlantaTaxExpert · Feb 29, 2008, 02:17 PM

Well, you heard wrong.

You lose your FICA tax exemption at the end of the fifth year of F-1 visa status, which, for you, was on 31 December 2005.

Now that you KNOW that, you have the legal obligation to tell your employer and GIVE THE 2007 FICA REFUND BACK. To do otherwise is tax fraud, which is a crime punishable by prison time.

Wikipedia is NOT a reliable source for tax policy.

ToxicTexan · Mar 25, 2008, 05:02 PM

I don't understand how that could be ""tax fraud".

When FICA taxes are deducted from the payroll, the only thing that changes is the total tax already paid. Gross income remains the same, taxable income remains the same (for single filers with simple life as a F-1 student) and therefore, the tax due remains the same too.

So if the total deductions exceed the tax due (which has been my case always, and I'm sure is the case for F-1 students) then how would FICA decduction change anything ? Only thing it will do is return the amount later (afer deducting it from the paycheck regularly).

Maybe I don't understand this correctly, so please write back if I'm wrong.

MukatA · Mar 26, 2008, 01:30 AM

Students on F1/OPT are exempt for only 5 years. After that your OPT income is subject to FICA taxes and you can file resident tax return.

ToxicTexan · Mar 27, 2008, 09:58 AM

Originally Posted by MukatA

Students on F1/OPT are exempt for only 5 years. After that your OPT income is subject to FICA taxes and you can file resident tax return.

Yeah, everyone can figure that out from the previous posts... but I'm asking something else.

The IRS is not stupid. I think they realize too that it's a waste of time to ask for FICA taxes from F1 students, since the amount will be reimbursed when tax returns are filed. Or are FICA taxes not included in the total tax already paid ? That is, are the tax already paid refer only to Federal taxes ? In that case, I can see that the amount deducted for FICA will not be reimbursed when tax returns are filed, and that would be tax fraud (as Atlanta Tax Expert pointed out).