I have been working on H1B visa for the last two years.
I recently discovered that as H1B I still need to pay FICA (social and medicare) tax.
But my company did not withhold these taxes for me for two years now.
What should I do? Am I required to pay the prior missing FICA taxes? Will I be considered conducting tax fraud?
Thanks!

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Originally Posted by nwuyiqiao

I have been working on H1B visa for the last two years.
I recently discovered that as H1B I still need to pay FICA (social and medicare) tax.
But my company did not withhold these taxes for me for two years now.
What should I do? Am I required to pay the prior missing FICA taxes? Will I be considered conducting tax fraud?
Thanks!

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You will have to explain your employment situation. If you are EMPLOYED (not self employed) by law your employer HAS to deduct these taxes. It's not a matter of choice or a matter of citizenship.

1. Are you an employee or an independent contractor? Did you get W2 or 1099-misc from your employer? If you are an independent contractor, then you must pay your own taxes. Read: Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor.

2. If you are a W2 employee, then your employer must withhold FICA taxes. You must send them email so that they start deducting it, and they also collect it from full year. For past year, the IRS will question your employer. Then your employer will contact you to collect the back taxes.

Now that you know that you are liable for FICA taxes, you have the legal obligation to inform your employer of this fact.

Your employer was suppose to collect your share of the FICA taxes for 2006 and 2007. Technically, he has NO LEGAL STANDING to do that collection now, and if he attempts to do so, you can refuse.

Of course, your employment would probably be terminated, but you would avoid paying the back taxes for two years.

For 2008, the employer has the right to collect the back FICA taxes, and will retain that right until 31 January 2009.

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Originally Posted by AtlantaTaxExpert

Now that you know that you are liable for FICA taxes, you have the legal obligation to inform your employer of this fact.

Your employer was suppose to collect your share of the FICA taxes for 2006 and 2007. Technically, he has NO LEGAL STANDING to do that collection now, and if he attempts to do so, you can refuse.

Of course, your employment would probably be terminated, but you would avoid paying the back taxes for two years.

For 2008, the employer has the right to collect the back FICA taxes, and will retain that right until 31 January 2009.

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I didn't want to open a new thread but would like to ask a question, if I may?

Isn't the employer bound by Law to withhold FICA? Would the employer have any liability if, for whatever reason, the employer did not?

I haven't seen any indication that this is a 1099 employee - but perhaps he is but he doesn't mention Federal and State taxes, just FICA -

Judy:

With international students on a J-1 or F-1 visa who are working under either a Optional Practical Training (OPT) or Curriculum Practical Training (CPT), these students are EXEMPT from FICA taxes while on OPT or CPT.

CPTs normally last 3 - 6 months, but some OPTs can last up to two years. During these training periods, the student works full-time and earns a full-time income. I have seen OPT incomes in the low six figures in NYC for trainees at some of the Wall Street firms.

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Originally Posted by AtlantaTaxExpert

Judy:

With international students on a J-1 or F-1 visa who are working under either a Optional Practical Training (OPT) or Curriculum Practical Training (CPT), these students are EXEMPT from FICA taxes while on OPT or CPT.

CPTs normally last 3 - 6 motnhs, but some OPTs can last up to two years. During these training periods, the student works full-time and earns a full-time income. I have seen OPT incomes in the low six figures in NYC for trainees at some of the Wall Street firms.

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Hmmm - I learn from these boards every day. I have learned the J-1 and F-1 FICA info as well as why I should quit my profession and become a Wall Street trainee.

Thanks - I'm sure I answered this incorrectly in the past and now I have the correct info.

Judy:

Do not forget the NYC cost of living. Student trainees at banks routinely make $50K because that's what you need to live in NYC.

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Originally Posted by AtlantaTaxExpert

Judy:

Do not forget the NYC cost of living. Student trainees at banks routinely make $50K because that's what you need to live in NYC.

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OK, now for sure I'm moving. Wonder if you have to have knowledge of banking in order to work as a trainee at a bank? Well, I'm a fast learner and from the way the economy is going - well, that's another issue.

I actually used to live in NYC but had any number of roommates drifting in and out and we were under rent control.