[KiranP]

Hi,

I came to US on Oct 12th, 2006 on L1B visa in Milwaukee, WI. I'll be working here till Jan 7th, 2007.
Can someone help me on the following:
(1) how much tax I need to pay - if my income in 2006 is 14000$?
Do I have to pay for year 2006 (12th oct to 31dec) and year 2007 (1st Jan to 7th Jan) separately?
(2) Is it possible to pay tax online using Credit cards issued in India?

Thanks in advance for help.

[AtlantaTaxExpert]

KiranP:

A L-1 visa is normally for work performed in the U.S. for a company which is based in the L-1 visaholder's native country, which, based on question #3, is India.

Is your company based in India?

Does your employer maintain a permanent office, fixed base, or trade or business in the United States?

If they do have a permanent office, did that office pay you?

Are you an employee or an independent contractor?

I need answers to all these questions to properly answer your questions.

[KiranP]

Hi Atlanta Tax Expert,
Thanks for your reply.
Here are answers to your questions:
Is your company based in India?
My company is subsidery of a parent company which is in US.
Does your employer maintain a permanent office, fixed base, or trade or business in the United States??
Yes
If they do have a permanent office, did that office pay you?
The US parent compnay doesn't pay my salary. Only the it's indian subsidery pays my salary.
Are you an employee or an independent contractor?
I'm permanent employee of Indian subsidery, came here to work with US parent company to work for less than 3 months.

Now can you please answer this question:

I came to US on Oct 12th, 2006 on L1B visa in Milwaukee, WI. I'll be working here till Jan 7th, 2007.
Can someone help me on the following:
(1) how much tax I need to pay - if my income in 2006 is 14000$? Currently my Indian company didn't deduct any tax from my salary.
Do I have to pay for year 2006 (12th oct to 31dec) and year 2007 (1st Jan to 7th Jan) separately?
(2) Is it possible to pay tax online using Credit cards issued in India?

[AtlantaTaxExpert]

Based on the information provided, it is possible that your income is tax-exempt.

As an employee of an Indian company who came to work for less than 120 days, you may meet the criteria for your income to be exempt from U.S. taxes.

I recommend you speak with your company's payroll departments and have them review IRS Pub 901 (Tax Treaties) (which can be downloaded from www.irs.gov). They need to review Page 6 for India and determine if your case meets all three criteria. If they decide your case does meet all three criteria, you will owe NO taxes to the U.S.

If not, the answer to your questions are as follows:

1) You must file as a non-resident alien. You will not be in the U.S. long enough to meet Substantial Presence. Hence, you cannot claim the standard deduction. You CAN itemize, which means you can deduct the state income taxes you will also owe. Without knowing which state you worked in, I cannot accurately determine your tax liability. Without the state income tax deduction, your 2006 tax on $14,000 would be $1,231. If you are also being taxed on this income by India, a credit is available to you for payment of that tax.

Yes, the income, if taxable in the U.S. will be spread over TWO tax returns, one for 2006 and the other for 2007.

Yes, you can pay online using credit cards if it is one of the major brands like MasterCard or Visa.