Sometime it's really bewildering to find out how much of your money is sucked by the federal government as part of your taxes. Its so full of inconsistencies for H1Bholders like myself.
Your residency status for tax purposes is completely unaligned from your immigration status. You might qualify as a resident for tax purposes while remaining a non-immigrant alien for immigration purposes. And you end up paying all the taxes of a resident without enjoying any privileges of being one.
A non-resident files a special tax form, pays tax only on U.S. source income, and subject to special rates;conversely, if you are a resident for U.S. tax purposes, you are under the same rules and file the same forms as a U.S. citizen. That means you pay tax on your worldwide income rather than just U.S. source income. More fun is with the Social Security tax.
SS tax cannot be refunded, you can only claim SS benefits if you qualify. Basic qualification is reaching retirement age AND having contributed to SS taxes for 10 years. So a H1Bholder with an ambition of returning back to work in India will have no chances of ever getting back all these SS taxes; they will be enjoyed by the american baby boomers!!!! In today's scenario, the H1B worker gets the same SS benefits as an American worker who stops working in the US before 10 years, which is zero! Isn't that interesting?
1 comment:
great that you are blogging again . i guess there was some petition regarding the same don't know if there is something going on like reform or something . i guess the total amount contibuted every year is in billions .
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