[yoav.goldberg]

Hello,
I am an Israeli PhD student currently in the US for a 3 month period (short-term scholar at USC) under a j-1 visa. This visit is between June 1st and September 1st 2010.

I will probably come to the US on J-1 visa again for a post-doc, starting 2011 or 2012.

I understand the j-1 tax exemption period is for 2 years. If I apply for the exemption for this short visit, does it mean I will shorten the second exemption period? And by how much? If I claim exemption now, will my 2012 visit be exempt for 21 months (2 years minus 3 months), or much less (2 years minus a year and a half?), or are they completely independent visits?

Also, if I do not claim the exemption for the first visit, will I be able to claim the entire 2 years for the second one?

Thanks!

[AtlantaTaxExpert]

The wording in the U.S.-Israel Tax Treaty dictates that you are eligible for the tax exemption for 24 months, with NO restriction on doing the exemption twice, which means you could do the three-motnh exemption, then 21 months on the second visit.

However, it would be more advantageous to push the exemption entirely to the second visit, because, on the first visit, you could claim your travel costs to and from the U.S. plus your daily living expenses (rent, utilities, local transportation, food and incidental costs) as itemized deductions on Form 2106 and the Schedule A of the Form 1040NR.

This being the case, it is probable that these deduction would result in you paying little, if any, income taxes when you file Form 1040NR with the Form 2106 and 8843.

This option of claiming your daily living expense is available ONLY for J-1 tours of ONE year or less. You could NOT claim such deductions during a two-year tour.

[yoav.goldberg]

Thanks for the response!
I am a bit confused about how tax works in the US. I already got federal tax deducted from my first and second salaries. Can I still fill these 2106 and 1040NR forms? When do I do that? And how? Will I then get a tax refund?

[AtlantaTaxExpert]

Yes, you can deduct those expenses using Forms 2106 and 1040NR on the annual tax return which will be filed in January 2011 for the 2010 tax year.