Tax
Income tax in US
Income Tax return filing is very simple in US as compared to India. Here Tax forms are very simple and easy to fill up. One need not know all about Taxation laws, but still can very easily file a tax return.
There are two types of taxes. One is the FEDERAL Tax which is something like our Income tax and the other is the STATE Tax. Last day of filing the income tax return is 15th of April. Accounting year is considered from 1st of January till 31st of December. USA has a Tax treaty with India, which gives you an extra exemption. Check documents on the internet for more details on this treaty.
Tax forms
There are different types of federal tax forms for different categories of people. For those who are US residents and who have status of Resident Aliens, they have to file the 1040EZ form (form 1040 easy). Any person who is in the US for more than 183 days continuously, gains the status of a Resident Alien. Any person who is in US for less than 183 days in that financial year is considered as Non Resident Alien.
Non Resident Aliens will not have some Tax benefits which any US citizen or Resident Alien will have. Here in particular, Non resident Aliens will not get Standard deductions on their income. Also they have to pay Tax as per the Flat rate. So basically when you file your Tax return as NR you end up paying more taxes. But you have to file 1040NREZ if you have a Non resident Alien status.
You also have to file form 8843 for exemptions.
One also has to pay tax to the state government. Each state has a different tax law for the State Tax. A booklet of information on this is available on request. Tax forms are available freely at the public places like Post office, Public library and Snell Library where one can get the form that he/she requires. The form for Massachusetts non residents is form 1 NR-PY.
Along with the Tax you are supposed to send one form called "W2" form. This form is provided by the employer to all the employees. The form contains all the information based on the salary of the person. Also all the taxes paid by the employer to the State government as well as Federal government.
There are three copies of this form. One copy is to be sent with the State Tax form, one with the Federal Tax form and one is for the employee's personal record.
Before sending the W2 form one should check the validity of the information on it. Most important is the correct social security number. If there is any change in any of the information one should inform the employer asap. The Employer is supposed to send the corrected information to IRS and also a corrected copy to the employee which is called W2C form.
Help for filling tax forms
The government gives special services for the people who need the guidance. One can get this information even on phone by calling them. One can even go in person to understand the form. For filing the Tax return one can get help from the IRS (Internal Revenue Services). This is same as Income Tax department in India.
Apart from these facilities provided by the government one can even go to private Tax consultants. They charge $30 - $60. They take care of every detail and one need not bother about anything. You can also file tax returns online, though it is not advisable during the first year (for non residents). ISSI will also offer tax seminars for free. Check their website for details.
Exemptions
All students on F1 status are exempt prom Social security & medicare taxes. So make sure that you go to the payroll office the first time you get your paycheck and cancel it.