I am an MBA graduate and I graduated in May 2008. I pursued my MBA from Aug 2006 - May 2008. I was on F-1 Visa during this period.

My OPT started from June 19, 2008 and is valid until June 19, 2009. I plan to return to my country once my OPT expires. I started working for a company from August 1st, 2008. Can you please help me with the followiing questions: -

1. How much (in terms of %) is the federal income tax on OPT? Is it 8% or 10% or 14% or 23%?

2. Currently, my employer is deducting around $1000 a month as federal income tax on a gross salary of 62,500 per annum. Even if I end up paying more now, can I claim a refund afterwards?

3. I will be leaving US in June next year and as far as I know, I will not be filing my taxes for the next year until Jan 2009 when I get the W-2 form in December 08.But I will not be present in the US during that point of time. So can you please let me know as to how does the process work for filing taxes?

Thank you.

On F1/OPT you are non-resident for 5-years. You must file non-resident tax return. Your income is not subject to FICA taxes.
On the return, you will not get standard deduction. You must itemize deduction and will get deduction as per tax treaty.

For your income in 2008, you will get W2 around Jan 31, 2009. Even if you are not in the U.S. you must file your tax return. You can complete tax return from your country and mail it. Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

Thank you very much... I just have one more question: -

Why I am not eligible for a standard deduction?

Thank you

On non-resident tax return, you do not get standard deduction. Deduction is based on tax treaty.
For example, the tax treaty with India allows standard deduction. Students from China get $5000 as deduction.

So in order to be eligible for the standard deduction, one must be resident alien... right??

Not necessarily.

As MukatA noted, Indian citizens on a J-1 or F-1 visa get the standard deduction under the U.S.-Indian Tax Treaty.

Other foreign nationals must claim itemized deductions and get a treaty exemption that is dictated by their country's tax treaty with the U.S. (if they have one; not every country has negotiated a tax treaty).

The treaty exemptions ranges from ZERO to as high as $15,000).

I am an indian citizen with a valid F1 Visa which will expire in 2011 and currently working under OPT... Still I will not be able to obtain the standard deduction?

Ankur

No, you CAN claim the standard deduction, as authorized by the tax treaty with India.

Quote:

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Originally Posted by AtlantaTaxExpert

Not necessarily.

As MukatA noted, Indian citizens on a J-1 or F-1 visa get the standard deduction under the U.S.-Indian Tax Treaty.

Other foreign nationals must claim itemized deductions and get a treaty exemption that is dictated by their country's tax treaty with the U.S. (if they have one; not every country has negotiated a tax treaty).

The treaty exemptions ranges from ZERO to as high as $15,000).

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Hi, I am in US n F1 visa for last 1 year, and I am working on my OPT since July 2010. My Employer is deducting almost 18.75% Federal Income tax from my Pay stubs. Canyou please tell me if I have to pay that tax or not. And if yes, then can I save that tax.

Thanks
Saurav.