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-   -   H1B vs OPT taxation (https://www.askmehelpdesk.com/showthread.php?t=392282)

  • Aug 31, 2009, 03:50 PM
    beiserza
    H1B vs OPT taxation
    Hi All,

    I am an F-1 student currently on OPT (May 2009 till April 2010).

    I am starting a new job and my employer will sponsor my H1B visa for me.

    I need to decided whether to apply for an H1B with a change of status or without a change of status. Which means:
    With change of status:my H1B will start ticking on October 1st 2009 and I will get that actual visa in my passport the next time I leave the US

    Without an change of status: I can work on my OPT until it ends (April 30th 2010) and then get my H1B visa.

    I would like to know what is the difference in taxation between working on OPT and H1B, to decide if it is worth my hassle to apply without a change of status.

    Thank you all,
    Zach
  • Sep 1, 2009, 01:28 PM
    AtlantaTaxExpert
    Zach:

    You pay the SAME in state and federal income taxes whether you work under OPT or under the H-1B visa. The only dfference will be whether you can claim the standard deduction or not, and that may be offset by a treaty exemption. I cannot say whether a treaty exemption applies or not because you neglected to mention from which country you originate.

    The big difference is the Social Security (6.2%) and Medicare (1.45%) taxes, which are flat taxes withheld at the rates noted. This is money paid into a social insurance program in which you will NEVER qualify for benefits unless you eventually get a Green Card and permanently immigrate to the U.S.

    So staying on OPT until April 2010 means you will work six months WITHOUT paying these taxes. You can do the grade-school math to determine how much money you will save.

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