[sauravmba08]

Hi, I have been working on OPT since June 2010 with F1 status.
My employer is in Texas. He is deducting almost 18.75% Federal income tax from my pay stub. Please suggest me should I pay that tax. If yes, How can I save the most of it.
Are there any other taxes, which I have to pay.

Thanks
Saurav.

[wnhough]

QUOTE," He is deducting almost 18.75% Federal income tax from my pay stub."----I bet you need to contact your employer to know how he reaches that Fed. Tax rate(withholding Fed tax rate, 18.75%; only your employer knows how he/she has figured it out.) In general, as you can see, you remployer determines the value of your total withholding allowances (exemptions) as claimed on your current W-4 Form by multiplying each allowance (exemption) by the amount and Subtract the amount of any reductions,health insurance premium from your total gross earnings, thenUse the tables ( I don't know what table he/she uses,i.e. either wage bracket or percentage method quarterly averaging mehtod or etc... )to calculate the amount of federal income taxes.
Also regarding the rate of 18.75%, Fed tax rate withheld by your employer, I assume,it is the weighted average quarterly fed. Tax rate, not entire weighted average fed tax rate. (However,only you know if the rate is either effective or average fed tax rate , for you calculated the rate, didn't you? )
"Please suggest me should I pay that tax. "---You need to contaact your employer to confirm the amount of your fed. Tax liability.
"Are there any other taxes, which I have to pay. "--you are also subjected to State/Local taxes if applicable.

[MukatA]

On F1/OPT you are exempt from residency for 5-years. You must file non-resident tax return Form 1040NR or 1040NR-EZ and Form 8843. Your income is not subject to FICA taxes but you must pay federal income taxe. On your income you will get deduction based on tax treaty between the U.S. and your country. Since you are from India, as per tax treaty, you will claim standard deduction of $5,700 instead of itemized deduction.

What your employer is withholding is not your actual tax amount. Your total tax will be based on your tax return. If your total tax is less than the tax withheld, you will get a refund.
Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

[sauravmba08]

My actual tax is going above $1,000 every month, so it means I won't get a refund whatever I will pay above $5,700 in the whole year?

[wnhough]

QUOTE," . . . I won't get a refund . . ."---Tax refund means refund of overpaid taxes from the government to you. It is not FREE MONEY given to you from the Fed. Govt. Refund is due when your employer have Overwithheld or underestimated deductions , exemptions from W4, and credits or etc. Though you may like the fact that you are getting a tax refund, in fact you are granting the government an interest-free loan for most of the year.
if the amount of your Fed. Tax liaiblity on your 1040nr or 1040nr-ez is larger than the tax liaiblity withheld by your employer, then you owe the IRS tax.
If the amount of your fed.( state tax or other if applicable) tax liaiblity WITHHELD by your employer from wages/salaries is LARGER than the amount on your 1040 nr or 1040nr-ez, then as you overpaid, you receive back from the govt.
For example, the amount of your tax on your 1040nr or 1040nr-ez along with the form 8843 is $5,700 while the amount of the taxes withheld by your employer is $7,000. Then $7,000>$5,700=$1,300. You will get your tax refund of $1,300.

[AtlantaTaxExpert]

The amount of taxes being withheld is based on the filing status and the number of allowances claimed on the W-4.

However, for foreign nationals who are single, you can only claim SINGLE as your filing status and either ZERO or ONE allowance. This is an IRS rule for foreign nationals to ensure that enough taxes are withheld from your salary to cover any federal income tax liability.

For this reason, you will almost certainly get a refund when you file your annual tax return, and it gives you an incentive to file the return, even if you return to India before the end of the calendar year.

If you do NOT file, the IRS does not particularly care because the tax has already been paid.