[Jaesun-Yoo]

Dear Experts!

I guess this is one of the streotype questions that arise over and over again,
But I can not find an answer. Please help me.

I came to US as a F-1 student in July, 2002, and finished my degree in Aug, 2007.
Now I am working, but still in F-1 status with OPT, starting Sep, 2007 until Sep, 2008.

I heard that people on OPT do not pay for social security and medicare taxes, but
I stayed for five years. So my question is
*) do I need to pay social security and medicare taxes?
*) if so, what benefit is there for being on OPT?

I chose OPT instead of H1B, because of tax exemption. Now I am confused.

Thanks a lot!

[AtlantaTaxExpert]

Yes, you DO need to pay Social Security and Medicare taxes.

The five-year exemption for F-1 students expired for you on 31 December 2006.

Because of this fact, there are NO advantages to being OPT. You will have to file a normal tax return as a resident alien for 2007.

[Jaesun-Yoo]

Thanks for answering my question!

But I am still confused. It looks like Social Security and Medicare taxes
Are matter of whether I am non-resident or resident alien for tax
Purposes, i.e. it has nothing to do with OPT or H1B.
Then why do people choose for OPT instead of H1B?
I mean if I had stayed for less than 5 years, I would have obtained H1B
And yet would have not had to pay those taxes.

Is it just because H1B is harder to get than OPT?

Thanks a lot!

[AtlantaTaxExpert]

Persons on OPT are on an F-1 visa, and if the person has NOT been in the U.S. for over five years, that person is EXEMPT from Social Security and Medicare taxes while on OPT.

However, the exemption is only good for five years.

Persons on H-1B are under WORK visas, and therefore subject to Social Security and Medicare taxes.