Hi Experts,
I was unaware :( about the fact that if you work as a consultant on OPT/H1B and work at different client site, you can claim expenses which is not taxable. Hence, my entire income between April-August was taxed. (Started on OPT this April and on H1b this october)

Can I recover that money which was lost as tax. If yes, how.

Thanks for your attention.

The income earned while on OPT is subject to both state and federal INCOME taxes, but is normally exempt from the FICA taxes (Social Security and Medicare).

When you convert to H-1B, you become liable for the FICA taxes as well.

You must first request that your employer refund the FICA taxes withheld while on OPT. when they refuse (which theywill), get the refusal in writing.

You then request a refund using Form 843. Check out IRS Pub 519, page 48, for details.

If you need professional help, contact me at the email address below.

Hi Tax Expert,
I am not talking about what was taxed on my income but about exempting a part of my income for tax purposes (It can be shown as expenses).

Quote:

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Originally Posted by AtlantaTaxExpert

The income earned while on OPT is subject to both state and federal INCOME taxes, but is normally exempt from the FICA taxes (Social Security and Medicare).

When you convert to H-1B, you become liable for the FICA taxes as well.

You must first request that your employer refund the FICA taxes withheld while on OPT. when they refuse (which theywill), get the refusal in writing.

You then request a refund using Form 843. Check out IRS Pub 519, page 48, for details.

If you need professional help, contact me at the email address below.

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I do not recommend that you claim such expenses.

The IRS position on this is clear: Student who move to another location for OPT have not established a tax home at the university's location.

Hence, moving to the OPT location, even if for less than a year, does NOT constitute a temporary work assignment and therefore is NOT ELIGIBLE to claim temporary living expenses as deductions.

Sorry!

What about doing that on H1B. (Recently converted in October)

Quote:

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Originally Posted by AtlantaTaxExpert

I do not recommend that you claim such expenses.

The IRS position on this is clear: Student who move to another location for OPT have not established a tax home at the university's location.

Hence, moving to the OPT location, even if for less than a year, does NOT constitute a temporary work assignment and therefore is NOT ELIGIBLE to claim temporary living expenses as deductions.

Sorry!

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The only way you can claim such temporary living expenses is if you are living in one city and your family is living in another, and THEN only for one year at the most.

Again, claiming temporary living expenses while on F-1 or H-1B is an audit waiting to happen.