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Income Tax Deductions for H1b Employees: What will come back

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  • #16
    Originally posted by venukbh View Post
    Thanks inadmissible for continuously replying my concern. I understood that I've to pay tax for my sources of income in US.
    But what I heard is if the stay is < 180 days, the paid tax will be returned. Is this true?
    No. if you stay ~365 days and your income is <8K, there is no need to pay taxes.

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    • #17
      For United States single filers in 2015, the standard deduction is $6,300, and one personal exemption is $4,000.
      These #s do not change if you are physically present for 365 or 0 days a year or anything in between.

      For California single filers, standard deduction is $3,992, and the single exemption credit is $108 (equivalent to ~$9,250 in taxable income).
      However, this standard deduction and exemption credit needs to be prorated against your worldwide income.

      For example, imagine an Indian national who in 2015 spends 340 days in the Dubai (United Arab Emirates) earning $180,000, and spends 15 days in San Jose (California) earning $20,000 on H-1B. Because he is not substantially present in the United States and does not have a green card, he is deemed a non-resident for United States purposes. He is non-resident (better described as part-year resident) for California purposes. Because he is a part year California resident, he is not eligible for the renters credit.

      His United States taxable income is $20,000-$6,300-$4,000=$9,700 taxed at the 10% bracket, total tax owed is $970.
      His California taxable income is $20,000-($3,992*$20,000/$200,000)=$19,600.80 taxed at the 1% and 2% brackets = $339, further reduced by ($108*$20,000/$200,000), total tax = $339-$10.8 = $328.
      Last edited by inadmissible; 06-13-2015, 02:05 PM.

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