Ask Experts Questions for FREE Help !
Ask
    nitinravinder82's Avatar
    nitinravinder82 Posts: 4, Reputation: 1
    New Member
    		  
    #1

    Jan 7, 2008, 12:58 PM
    Income Tax for Students on OPT
    I am an Indian Masters Graduate, currently working on OPT. I would like to Know what is the percentage of tax( in California) while working on OPT. and Say if I am given 10,000 USD taxable amount from the company, How much will I receive in hand after applying California taxes.

    Thanks,
    Nitin.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jan 7, 2008, 07:31 PM
    Nitin:

    If your total income is $10,000 for 2007, you will owe $38 in California taxes.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Jan 8, 2008, 01:22 AM
    You will file 1040NR and Form 8833 to disclose treaty position. As per India U.S. tax treaty you will get standard deduction of $5,350 and exemption of $3,400. So you won't have any federal tax.

    You will also file CA return as non resident.
    Your income is not subject to FICA taxes (social security and medicare taxes).
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Jan 8, 2008, 07:16 AM
    Agree to the non-resident status for California. His status as a student dictates that.

    Form 8833 is NOT really required due to the low income level. He CAN file it if he wants, though.
    nitinravinder82's Avatar
    nitinravinder82 Posts: 4, Reputation: 1
    New Member
    		  
    #5

    Jan 8, 2008, 11:41 PM
    Quote Originally Posted by AtlantaTaxExpert
    Nitin:

    If your total income is $10,000 for 2007, you will owe $38 in California taxes.

    10,000 USD is not my Income, it just the relocation charges. Well my income is 75,000 usd per annum. So my question was how much relocation money will I get in hand after tax.
    nitinravinder82's Avatar
    nitinravinder82 Posts: 4, Reputation: 1
    New Member
    		  
    #6

    Jan 8, 2008, 11:42 PM
    Quote Originally Posted by MukatA
    You will file 1040NR and Form 8833 to disclose treaty position. As per India U.S. tax treaty you will get standard deduction of $5,350 and exemption of $3,400. So you won't have any federal tax.

    You will also file CA return as non resident.
    Your income is not subject to FICA taxes (social security and medicare taxes).


    10,000 USD is not my Income per annum, its just the relocation Money. Well my income is 75,000 usd per annum. So my question is how much relocation money will I get in hand after tax.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #7

    Jan 9, 2008, 02:32 AM
    If you break your question for year 2007 and 2008, then you will get exact answers. Also up to now we have assumed that you are Single.
    1. Total income in 2007 and your visa status.
    2. Total income in 2008 and your visa status. If you will get relocation money in 2008, what will be your actual relocation expenses?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #8

    Jan 9, 2008, 10:23 AM
    We also need to know if the relocation money is a BONUS (which is taxable) or was paid in response to a moving expense report (which would make it non-taxable).

    More than likely, the relocation money IS taxable, which means you want to file Form 3903 to claim the moving expenses.
    nitinravinder82's Avatar
    nitinravinder82 Posts: 4, Reputation: 1
    New Member
    		  
    #9

    Jan 9, 2008, 11:23 AM
    Quote Originally Posted by AtlantaTaxExpert
    We also need to know if the relocation money is a BONUS (which is taxable) or was paid in response to a moving expense report (which would make it non-taxable).

    More than likely, the relocation money IS taxable, which means you want to file Form 3903 to claim the moving expenses.

    Well about my status I am joining my Company on 14th Jan. This is my first Job after my graduation and I will be on OPT till December 2008.

    This relocation Money of 10,000 $ is a bonus which is taxable. So how much Money will I get in Hand after Tax (In california)?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #10

    Jan 9, 2008, 01:41 PM
    You probably do not owe ANY California tax, so you should get all of the withheld California taxes back once the moving expenses are deducted.

    From where did you move to California?
    nightan's Avatar
    nightan Posts: 10, Reputation: 1
    New Member
    		  
    #11

    Jan 9, 2008, 02:17 PM
    This is an interesting discussion. I have a few questions further to the above. Do I ask them here or start a new topic?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #12

    Jan 9, 2008, 02:54 PM
    Nightan:

    You can post them here or start a new topic; your choice.
    Visa Taxes Expert's Avatar
    Visa Taxes Expert Posts: 40, Reputation: 1
    Junior Member
    		  
    #13

    Jan 10, 2008, 11:40 AM
    Agreed!
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Wealth & Income Dispersion, Income Mobility, and Economic Injustice [ 20 Answers ]

There's a lot of trash being talked here and elsewhere these days about how income and wealth are distributed among the US populace, how these distributions are changing, what is causing these changes, and whether those changes are benign or malevolent. Beyond that lie the questions of whether,...

Tax query for no income F1 students [ 1 Answers ]

Hi, I was an F1 student for the last two years and presently on OPT. I did not have any income during my F1 status. But I just came to know that there is some form that I need to file even for such cases. Could someone help with the type of forms and also the time frame for which they can be...

Are Indian non-resident students subject to taxes in India on US income? [ 3 Answers ]

Are students who are non-resident in the US for tax purposes, subject to tax in India? If so how can the back taxes be paid? Should we submit that we were subject to taxes in India because we intend to pay our taxes?

For F-1 Students is whole 'Stipend' income tax exempt under India-Usa Treaty ? [ 2 Answers ]

Hi, I entered USA in the August of 2005 on F-1 Visa. I received a graduate assistantship for one year and later on became a Research Assistant (RA) in my department. Being an RA entitles me to full tuition remission and am paid a stipend of 18K per year. When I filed my taxes previously with...

2006 taxes: F-1 OPT Income & Foreign Income [ 4 Answers ]

Hi, I have a somewhat complicated question about my 2006 taxes... I came to the US in 2001 on a student visa (F1). After I finished my degree I worked one year under OPT, and I left when my OPT/visa expired in May 2006 and went home to my native country and got a job there. So basically I...

View more questions Search