[mailmegaby]

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

[AtlantaTaxExpert]

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.

[mailmegaby]

Thanks a lot for the detailed reply

[AtlantaTaxExpert]

Glad to help!

[aditya_2kx]

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 ?

[AtlantaTaxExpert]

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

[aditya_2kx]

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 ?

[AtlantaTaxExpert]

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

[aditya_2kx]

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. :)

[AtlantaTaxExpert]

Glad to help!

[surajsharma]

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

[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%.

[aditya_2kx]

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 ?

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%.

[AtlantaTaxExpert]

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

[aditya_2kx]

Thanks again Sir !

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

[AtlantaTaxExpert]

Glad to help!

[RaghavR]

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

[AtlantaTaxExpert]

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.

[RaghavR]

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?

[AtlantaTaxExpert]

You probably WILL get a refund.