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    illusions84's Avatar
    illusions84 Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Jan 11, 2009, 12:18 PM
    Tax deductions for an F1 graduate student.
    Hi,

    I'm a student on an F1 visa from India (have been here for 7 years). My income for the year 2008 was $16250. From this I paid
    $660 - for health insurance
    $3000 - towards student loan interest only

    I know I'm eligible for the $5450 standard deduction and an additional $3500 personal deduction. In addition, I believe student loan interest can be deducted (upto a maximum of 2500) in computing the adjusted gross income.

    I was wondering if there were any other deductions I was eligible for (anything for health insurance?).

    I also believe I will be filing taxes as a resident, having been here for 7 years.

    Also, am I eligible for a FICA exemption as a graduate student. How do I go about getting this.

    Thank you
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Jan 12, 2009, 01:25 AM

    After 5-years on F1, you must file resident tax return and also pay FICA taxes. You can deduct student loan interest payment and tuition and fee deduction up to $4000 as adjustment to income.
    illusions84's Avatar
    illusions84 Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Jan 12, 2009, 11:56 AM
    I was under the impression that if graduate students are earning a stipend for work that they are doing towards their degree (I'm required to do a year of research for my degree), they qualify for a student FICA exemption. Is this correct?

    Student Exception to FICA Tax
    This website seems to suggest so. My friends who are international graduate students at other institutions also say that the FICA tax is not withheld from their paychecks.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Jan 13, 2009, 01:31 PM
    Once the fifth year on F-1 passes, the IRS considers the student to be a resident alien by default.

    The student CAN continue to file as a non-resident (and thus be exempt from FICA taxes), but they must prove that they are maintaining a "closer connection" to their home country. The burden of proof in this case rests with the student, and it IS a hard sell to the IRS.

    Now, all student (U.S. and international) normally are exempt from FICA taxes on jobs they hold with the university where they are students. Generally, the job must be with the university itself (not with a separate company who has a contract with the university) in order to qualify for this exemption.
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