Ask Me Help Desk - How much taxes H1B visa holders pay?

How much taxes H1B visa holders pay?

Hello,
In average, how much (in percentage) does someone on H1B visa pay? I heard up to 30%, does that include medicare and social security, does it include state taxes? Or the 30% is only the federal income tax and still the rest are to be deducted? And if so how much in total would that be? I know each case is different, but I just need to know the average percentage we are talking about.

Thanks
Gaby

Gaby:

Persons on a H-1B visa pay the same taxes that U.S. citizens pay.

FICA taxes are Social Security (6.2%) and Medicare (1.45%) taxes imposed on a flat rate of your gross salary.

State income taxes range from ZERO (seven states have NO state income tax at all) to about 13%, usually taxed on a progressive (the more you earn, the higher you tax rate) scale. On average, expect the state income tax to be about 4%.

Federal income taxes are progressive in nature, starting at 10%, the 15%, then 25%, then 28%, then 33%, then 35%. Most of my H-1B visa holders fall in the 15% tax bracket.

So the average is about 27% in taxes paid from your salary.

That does not cover sales taxes paid on virtually everything bought in the U.S. plus other levies such as ad valorum taxes paid when you register a car or boat and property taxes paid each year if you own a house.

BOTTOM LINE: 30% is a good average figure overall.

Thanks a lot for the detailed reply

Glad to help!

Can you please refine the answer for 2012. I am going there to do my masters in computers in California. And if my monthly salary would be 6000/month what would be the total tax I would be paying ?

The only change is Social Security is temporarily is 4.2%. Everything else is the same.

So sir there isn't any special tax for H1 working Indians in US.. I mean one has H1 and one has green card and both are working there. Are there any taxes that one has to pay and other does not ?

They are taxed EXACTLY the same. That is required under the non-discrimination clause of the tax treaty.

Quote:

Originally Posted by AtlantaTaxExpert

They are taxed EXACTLY the same. That is required under the non-discrimination clause of the tax treaty.

Thank you Sir, for your prompt and apt answer. :)

Glad to help!

After H1B it depends if you are working for the same company which send you will be paying less but if you switch to other employer you surely get better wage more over average wage depends on your profile too
Like 1 Computer and Information Research Scientists $103,160
2 Computer Systems Analysts $82,320

For all
Job Profiles and Average salaries for H1B visa holders

State income tax % depends on the state.

Social Security is 4.3%, and Medicare is 1.45%.

Federal income starts at 10%, then 15%, then 25%, then 28%, then 31%, and tops out at 35%. You will probably top out at 25%.

Asking further if I earn in us California on h1 visa will I have to pay tax in India in addition to paying to us ?

Quote:

Originally Posted by AtlantaTaxExpert

State income tax % depends on the state.

Social Security is 4.3%, and Medicare is 1.45%.

Federal income starts at 10%, then 15%, then 25%, then 28%, then 31%, and tops out at 35%. You will probably top out at 25%.

No. Under the U.S.-India Tax Treaty, income earned INSIDE the United States is taxed ONLY by the United States.

Thanks again Sir !

Quote:

Originally Posted by AtlantaTaxExpert

No. Under the U.S.-India Tax Treaty, income earned INSIDE the United States is taxed ONLY by the United States.

Glad to help!

What about the dependents? If you have 2 H4 dependents, do you get 15% as tax rebate?
Appreciate your answer!

It is not that simple. You can claim the H4 as dependents un;less one is yor wife, in which case she is your JOINT filer, NOT your dependent.

The H4 who is your child will qualify for the $1,000 Child Tax Credit IF the child was present in the U.S. in 2011.

Thanks for your reply. I clicked on "Helpful" but didn't work :)
Won't there be rebate for a non-earning JOINT filer in that case?

You probably WILL get a refund.

Dear Sir,

I am new to US and under J2, I got my first Salary (Monthly - 7000). It deducted 30%+ taxes. Is it correct? Are there any difference to treat J2 or is it same as
H1?

Thanks,
Bawath

Bawath:

Off-hand, that sounds about right. You owe a FLAT 4.2% for Social Security and 1.45% for Medicare.

You are at least in the 15% federal tax bracket. It will be higher in 2013 because of your $84,000 annual salary.

Your state tax rate depends on the state, plus there may be local income taxes.

Hi

I moved to US in July 2012 with H1b visa.

Do I need to file the tax and I will considered as resident alien or Non resident alien.
Do Non resident alien have different tax brackets, exemption?

The lynchpin to how you file is your marital status.

Are you married?

Dear Sir,

I am J2 Visa Holder and monthly salary is 7000. Please let me know, how much I have to pay for tax as a percentage.

Thanks,
Urban

Urban:

Are you married? Children?

Yes Married , But no children.

If you are J-2, then your spouse is a J-1.

You will file as a non-resident alien, filing Forms 1040NR. Form 8843 is NOT required of you.

You will pay FICA (Social Security at 4.2% for the rest of 2012 and 6.2% for 2013 and beyond and Medicare at 1.45%), plus state and federal income taxes.

At $7,000 per months, your tax liability will be $16,872 for 2012.

I shall be going with my wife(on h4) to US in February 2013, Can you guys let me know what amount I will get as take home if my salary would be 62400$ per annum?

The FICA rates of 6.2% for Social Security and 1.45% for Medicare are flat tax rates, withheld from each paycheck.

You will be in the 15% marginal tax bracket, so your federal tax liability will be about $5,500. I cannot say about the state without know WHERE you are living and working.

Hi guys, I'll be going to work to California in a couple of months and I'm trying to figure out a ballpark of the taxes I'll have to pay. I'll go with an H1B, I'm married guy and I have one kind (9 years old), annual salary is $120k

Any help would be greatly appreciated!

You will be in the 25% marginal tax bracket.

Based on 2012 tax rates, your federal tyax liability will be about $16,000, while California will be $5,250.

Quote:

Originally Posted by AtlantaTaxExpert

You will be in the 25% marginal tax bracket.

Based on 2012 tax rates, your federal tyax liability will be about $16,000, while California will be $5,250.

Thank you so much for your quick response, the email notification went directly to my spam folder and I hadn't realized someone answered my question already.

I was just notified a couple of days ago that I'll be on a TN visa rather than an H1B, does that change anything?

Thanks again!

No, not really, as the TN visa is also considered to be a work visa.

Quote:

Originally Posted by AtlantaTaxExpert

No, not really, as the TN visa is also considered to be a work visa.

Great, thank you very much!

Glad to help!

Hi,

I received an offer to move to Louisiana on an H1B visa and I'm trying to calculate my taxes online while negotiating the offer. I'll be traveling with my wife and no children, and my wife doesn't work. I'm negotiating an annual salary between $100k to $120k.

My understanding is that I would be filling as a non-resident alien since I don't have a green card and I wouldn't qualify for passing the substantial presence test.

I found mixed information on whether I can file as married and claim more than 1 withholding allowance, or if I have to file as single since I'm a non resident alien. Can you please explain to me which form do I need to file, whether I can claim allowances for my wife or not, and the percentage of federal tax, state tax, medicare and social security I would have to pay in Louisiana as a non-resident alien on an H1B visa?

Thanks!
John

Actually, you probably WILL file as a residnet alien, because you will file jointly with your wife. Since she does NOT work, that is the MOST advantageous way to file.

If you are married, you can claim MARRIED with TWO allowances on the Form W-4.

Expect to pay about $17,500 in federal income taxes and $3,750 in Louisianan state taxes. The Social Security tax is 6.2% and the Medicare tax is 1.45%, plat percentages taken out of each paycheck.