[beiserza]

Hi All,

I am an F-1 student currently on OPT (May 2009 till April 2010).

I am starting a new job and my employer will sponsor my H1B visa for me.

I need to decided whether to apply for an H1B with a change of status or without a change of status. Which means:
With change of status:my H1B will start ticking on October 1st 2009 and I will get that actual visa in my passport the next time I leave the US

Without an change of status: I can work on my OPT until it ends (April 30th 2010) and then get my H1B visa.

I would like to know what is the difference in taxation between working on OPT and H1B, to decide if it is worth my hassle to apply without a change of status.

Thank you all,
Zach

[AtlantaTaxExpert]

Zach:

You pay the SAME in state and federal income taxes whether you work under OPT or under the H-1B visa. The only dfference will be whether you can claim the standard deduction or not, and that may be offset by a treaty exemption. I cannot say whether a treaty exemption applies or not because you neglected to mention from which country you originate.

The big difference is the Social Security (6.2%) and Medicare (1.45%) taxes, which are flat taxes withheld at the rates noted. This is money paid into a social insurance program in which you will NEVER qualify for benefits unless you eventually get a Green Card and permanently immigrate to the U.S.

So staying on OPT until April 2010 means you will work six months WITHOUT paying these taxes. You can do the grade-school math to determine how much money you will save.