Hi,

I was working on OPT last year (2006) till 12/3/2006, when I had change of status to H1-B. I was exepmted from Social Security and Medicare Tax duirng that period on OPT. I went to file my tax returns at a tax agent asnd I was told that I would be getting back my entire FIT due to India/US tax treaty deductions. But I was under the impression that for this year its only $5000 and the returns are calculated based on this amount. The agent showed me a Publication 901 from IRS and also the clause that I am exempted from any taxes, but it also had a statement that this was for payments from abroad only and does not include payments borne by permanent establishments in US and other government agencies. What does this mean?

Am I entitled to get back the entire FIT that I paid? Is it possible? Because I was being paid by an empolyer in US during my OPT.

Could some one please help me out here.

Thanks,
Sharath

Sharath:

Unless your income is less than $8,450, the tax consultant is WRONG.

You ARE liable for federal income taxes just like U.S. citizens on income earned in the U.S.

Find yourself another tax consultant.