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Old 04-02-2014, 11:17 PM
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Gift Tax on J1 Visa's

I have a question that i'm hoping that some of you could possibly answer for me. I am currently in the US (from India) on a J1 visa, in year 1 of 4 of my post graduate education. I receive a regular salary for this job, and a W2 with standard taxes and deductions as defined by the US India Tax Treaty. I was wondering if you guys could shed some light on questions that i'm finding rather long winded and complicated answers to, that don't really make sense to me.

1. I understand that i am subject to exemption from SS and Medicare taxes for my first 2 years on a J1. From what i understand it is because after 2 years on a J1, i become a resident alien from a non-resident alien? or am i completely confusing two different concepts.

2. With regards to receiving gift from family and friends, what are the rules for J1 visa holders?
The scenario that has me perplexed is if i receive money from non-blood relatives in the US (who are paying their taxes regularly), in exchange for money given to their family members in India (also paying taxes there in india).
is there anything illegal/illegitimate about this? also how does this affect my tax calculation at the end of the year? or does this just count towards my annual non-taxable gift allowance of 14,000$??

i realize this question might be too specific, but whatever i've read so far is too non specific and general. Thanks in advance.



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Old 04-03-2014, 02:14 AM
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Quote:
Originally Posted by taxnoob85 View Post

1. I understand that i am subject to exemption from SS and Medicare taxes for my first 2 years on a J1. From what i understand it is because after 2 years on a J1, i become a resident alien from a non-resident alien? or am i completely confusing two different concepts.

2. With regards to receiving gift from family and friends, what are the rules for J1 visa holders?
The scenario that has me perplexed is if i receive money from non-blood relatives in the US (who are paying their taxes regularly), in exchange for money given to their family members in India (also paying taxes there in india).
is there anything illegal/illegitimate about this? also how does this affect my tax calculation at the end of the year? or does this just count towards my annual non-taxable gift allowance of 14,000$??

i realize this question might be too specific, but whatever i've read so far is too non specific and general. Thanks in advance.
1. yesafter your tax exempt years in J1 ends and you need to pay Federal and FICA unless you request to keep your status as a nonresident alien.i guess So, After the exempt period, the days in the U.S. count towards the SPT. If you meet the SPT, you are resident for tax purpose, and must file resident tax return.you need tofile 1040, not 1040 nr

2. aslongas the gift for you is after tax dollar then, it is ok.then the nonrelative in US needs to file form 790 aslongas the amount of the gift ti you exceeds $14k in 2014.if the amount is less than $14k, then no need to file form 709.

note;regardless of your status, you , as a done, are not subject to the gift tax;however, aslongas the amount of gifts exceeds $100k , then you must file form 3520 with the irs just fir info return not to pay tax. In other words, IRS Form 3520 is due on the same date as your annual income tax return, including extensions.



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Old 04-04-2014, 11:23 PM
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Thanks for that information, that definitely clarified that issue for me.

I had another question as well.
If as a nonUS citizen living in india, i had an account in my home country, on which i do gain an interest/income from savings there. Do i need to pay taxes on that in the US? Or will i pay taxes there in India?

Thanks in advance.



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Old 04-05-2014, 01:26 AM
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Originally Posted by taxnoob85 View Post
If as a nonUS citizen living in india, i had an account in my home country, on which i do gain an interest/income from savings there. Do i need to pay taxes on that in the US? Or will i pay taxes there in India?

Thanks in advance.
it depedns; aslongas you are a US resident even just FOR TAX PURPOSES, then you must report th einterest income in your bank acct in INDIA to IRS/your state.You also need to file form TD F 90.22.1 with the IRS aslongaas the bal in your bank acct in INDIA is $10K or exceeds $10K just for info return to the IRS. so UNLESS you are a US resident for tax purposes, then no; you do no tneed to rpeort your interest income that you earned in INDIA to IRS/your state



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