We’ll speak about this subject considering your position
as a trainee and after as a regular worker.
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| The
trainee Case J-1 Visa : |
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So again do i have to pay taxes in the US as a trainee ?
Yes, but not all of them. There are certain taxes you must
pay and other you don’t have to pay.
| You do not pay |
You must pay |
| Social security tax |
Federal income tax |
| Medicare |
State income tax |
| Federal unemployment tax |
City income tax |
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Social security and Medicare
Taxes ( FICA)
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you don’t pay
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Federal unemployment (FUTA)
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you don’t pay.
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Income taxes
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you do pay. The US income taxes
are imposed by the Federal, state, and local governments.
Your employer generally withholds income tax from your
salary and pays it directly to the government. Failure
not to pay any taxes you owe could cause problems for
you in the future if you apply for a visa to return
to the US
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Federal income tax
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you do pay. Income is paid to the
federal government by all income-earning individuals.
It is paid on income from salaries, wages, tips and
commissions . Approximately 10 to 15 percent of
your salary will be withheld for federal income tax.
But a portion of it may be claimed as a refund to you
at the end of the year (check our later section " Tax
return form and Tax refund ")
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State income tax
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You may pay. State may charge income
tax in accordance with local laws. State income taxes
are approximately 5 to 8 percent
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City income tax
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you may pay. City may also charge
income tax according to local laws. City income taxes
vary, so check with your employer
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 Top
When you begin your job, your employer will ask you to complete
a W-4 Form (Employee’s Withholding Allowance Certificate)
to ensure that you are not overtaxed. Your employer will keep
this form while you are working and will determine how much
tax should be withheld from your paycheck.
If you do not fill out your W-4 Form properly, you
may have to pay more tax in the future. Please note that you
are classified as a " Nonresident Alien ",
so complete as instructed :
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Check only " single " marital
status on line 3 (even if you are married or divorced)
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Claim only one withholding allowance on line 5, unless
you are a resident of Canada, Mexico, Japan, or South
Korea or a US national)
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Request that an additional $4.00 per week be withheld
on line 6, if the pay period is 2 weeks, request that
$8.00 be withheld instead.
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Do not claim " exempt "
withholding status on line 7.
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Top
At the end of the calendar year , your employer will send
you a W-2 Form detailing your total wages and
the amount of each tax that was withheld. The employer will
send the W-2 Form to your home address. If you return to your
home country before the end of the calendar year , be sure
to give your home country address to your employer so they
can send you this form overseas. If you have not received
your W-2 Form by February 15 of the following year, you should
contact your employer for a replacement.
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1)Total wages earned for the income
year
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2)Total amount of Federal Income
taxes withheld
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3)Total amount of Social Security
Wages : this should be " 0 "
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4)Social Security Tax withheld :this
should be " 0 "
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5)Medicare wages and tips :
this should be " 0 "
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6)Medicare tax withheld : this
should be " 0 "
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7)Lines 7 to 15 do not apply to
you
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16)To be filled in by your employer
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17)State wages earned, same amount
as federal wages in box #1
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18)State income Taxes :participant
who want to file for a refund for this amount must
complete a State Tax form.
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19)The city where you worked
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20)Local wages earned : same
as state and federal amount
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21)Local income tax : local
income tax vary by city
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W4&W2forms |
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Online information on the IRS
website and online forms... |
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Top
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| Tax
return form & Tax refund : |
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When you receive your W-2 Form, you will have to fill out
tax return forms. All forms are available from banks and post
offices in the US. You may also phone the "Internal Revenue
Service" (IRS) at 1-800-829-1040 to request
a federal form.
The federal tax form you will have to complete is the 1040NR-EZ,
which is specially for nonresident aliens earning less than
$50,000 a year. The US tax year runs from January to December.
The deadline for filing tax return forms for a given year
is April 15 of the following year.
*Note : If your internship starts in one calendar
year and ends in another, you will have to file taxes each
year. For instance, if your internship runs from July 2000
to July 2001 , you will need to file 2000 taxes in April 2001
and 2001 taxes in April 2002.
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| The
Regular Worker Case : |
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Regular worker will have to pay all the taxes as any US citizen
pays.
Income; Federal ; State ; Social Security and city
taxes.
Some States have sales taxes like in California, in Florida
the tax is 6,5%. Each State has his own policy of Income Taxes.
The forms you’ll be using are :
1040 NR-EZ Form and the W-2 Form. The 1040
Form is part of the W-2 Form both are additional. Those forms
can be found on the Internet. Not like the Trainee case seen
above, the regular worker will have to fill out all the boxes
and lines..
Besides your Income Taxes you’ll have to pay your " Retirement
taxes ", "Health Insurance"
for you and your family . Then usually the 401 K Plan
is taken in charge by the employer (the company).
The 401K Plan is part of your " Retirement Process "
and is Tax free. It usually given after one year of "length
of service" in your company. About the 401K plan and
how to deal with it go check those website, they are very
helpful and interesting:
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401K
Fees |
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Exhaustive site devoted to analyzing your
401K pension plan |
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DT
Online
How to use 401K Plan to buy a house or understand taxes
on household employee |
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Nowadays most of the people use " Accountants "
or get Computer Software . But when you’ll start paying taxes
you’ll get a " book " by mail explaining
in details how to handle your taxes.
Top
Here are the main websites used to help people with their
taxes and the online softwares:
*Note : You may get " tax refund "
, if the government judges , based on certain factors, that
you have paid too much taxes, the reimbursement will take
5 to 10 days. Another tip, is that you can get Tax deduction
by donating some of your objects or clothes to charitable
organizations (thrift shops...)…They'll give you a paper in
exchange that will help you to get tax deductions...
Taxes vary from one person to another, and are
based upon your revenues. If you do have children you ‘ll
get a " Bonus " which changes every
year.
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