Hi,

I am about to start as a trainee (Finance and System Technologies) in NY on a J1 Visa. (18 month).
I normally live in Denmark. Denmark has a rule, that states that if I stay in US more that 6 months, then I am free of danish tax.

1) I would like to know what percentage taxes I am going to pay in NY?


2) My employee will pay for my accommodation in US.
Is this a taxable benefit? What tax percentage?

I have my own apartment in Denmark.
I will pay for my danish apartment for my entire stay in US.


Thanks

If you are maintaining an apartment in Denmark, then the apartment in NY is a tax-free benefit.

Need to know how much you are being paid to determine percentages.

I would have to research it to be sure, but I suspect that your pay will be subject to U.S. income taxes given the fact that your J-1 visa is for a corporate/private company (vice a university).

I believe that you should be exempt from Social Security and Medicare taxes.

Hi,

I also think that I will pay federal and state taxes, but not medicare and social security tax.

How do a calculate the total tax?
Are medicare and social security tax included in the federal tax?
Are J-1 Visa holders eliagable to a tax deduction?

Looking at Tax Tables, the Federal Income Tax for me is 28% ($74,201 - $154,800) and NY state tax is 6.850% ($20,001 - $100,000).

I will do training in Finance and System Technologies for a private company.


Thanks
Regards

Thomas

Thomas:

Social Security (6.2%) and Medicare (1.45%) are flat taxes. The Social Security stops at $90,000 for 2006 and $97,000 for 2007.

If you file as a resident alien, you will be authorized a personal exemption of $3,300 and a Standard Deduction of $5,150. Hence, the first $8,450 is tax-free.

If you file as a non-resident alien, you get the $3,330 personal exemption, but NO standard deduction. You can, however, deduct any NY state and NY City income taxes that will be withheld from your salary. Given the levels of pay you are talking about, it is likely these taxes will exceed the $5,150 standard deduction.

Hi,

Thanks for you help.

I have a few other questions.

1) If I don't pay Social Security and Medicare tax, will my total tax percent then be 34.850% (28.0 + 6.850%) ?
2) What kind of tax will I pay for my paid accommodation in US. (paid by my employee)


Again, thanks.

Regards
Thomas

Thomas:

1) 34.85% sounds about right, but it will not be exactly that amount because the personal exemptions and other deductions available to you. I expect the correct amount will be closer to 30%. If you send me your projected 2006 salary, I can do a more-precise strawman return for you.

2) None. Because you are maintaining an apartment in Denmark, the paid accommation is considered part of your non-taxable per diem that is reimbursement for your temporary living expenses in the United States.

Hi again,

Thanks for all your help.

Glad to help!