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H1, L1 Visa Holder Special Tax Situation

Guest post by: Krutika Chheda

Article Overview: Among the different tax situations we come across, H1 L1 visa holder tax situation stands out as a special tax situation. Several H1, L1 tax payers find out the uniqueness of the H1, L1 visa holder tax situation and special deductions available for hi-tech consultants. With the technology spending tightening and IT consultant billing rates getting crushed, every dollar saved in taxes seems like gold!

H1, L1 Visa Holder Special Tax Situation

Does H1, L1 Tax Situation require Special Treatment? Can H1, L1 visa worker tax situation be treated like ordinary Tax Payers filing 1040 Tax Return or does it require any special treatment? Most of the popular tax software and tax consultants may treat H1, L1 tax returns no different than ordinary US citizen Tax Returns. However, IRS regulation allows for special treatment in case of temporary workers in the US. There are specific guidelines in the IRS code to determine the tax status as well as calculate deductions based on special conditions due to temporary work status. Since H1, L1 tax payers account for less than 1% of all Tax Payers, most popular tax software and tax consultants may not pay specific attention to the regulations that govern US temporary worker taxes. Perhaps it is not cost effective for the big tax software companies to invest in programming code that covers H1, L1 special tax situation.

Often H1, L1 tax payers are surprised when they find out the benefits offered in the tax code, especially during the initial year of their assignments in the US. Unfortunately, most of them miss out on these benefits without the help of a qualified tax professional that focuses on H1, L1 related tax issues.

H1, L1 Visa Workers may be considered US Resident for Tax Purposes

Most H1, L1 consultants may be waiting for years for their US resident card (Green Card), but IRS may already consider them as US Resident for tax purposes. The first tax distinction IRS makes is between a Non Resident Alien and a Resident Alien from a tax code perspective.

IRS has specific guidelines to determine Resident Status for tax purposes through the ‘Substantial Presence Test'. Once it is established that you are a US Resident (for tax purposes only, your immigration status may still be H1, L1 or other temporary work visa), you are subject to US taxes on your global income, including income in your home country. Incomes from different sources such as passive investment income as opposed to active income through a job are also treated differently.

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Article Tags: charlotte, charlotte h1 visa taxes, H1 tax situation, H1b Visa Taxes, l1 visa, visa holder



Related Forum Posts
Re: When you get one, get a Visa - I was thinking about Visa or Mastercard. Visa sounds good though! What about American Express?
Can you tell me about 80/20 Sales Rule? - I’ve a situation like this. I get 80% of my business from 20% of my customers, shouldn't I work harder on the 20%? Communicate at least 4 times a year? Special offers/vip sales? Unexpected free gifts? And if the other rule says I'm going to lose 20% of my customers every year (hopefully through no fault of my own), won't some of them my from my treasured 20% list? Maybe I should work to move some of the 80% to the 20% so I can afford the loss?
The 80/20 Rule - If the rule says I should get 80% of my business from 20% of my customers, shouldn't I work harder on the 20%? Communicate at least 4 times a year? Special offers/vip sales? Unexpected free gifts? And if the other rule says I'm going to lose 20% of my customers every year (hopefully through no fault of my own), won't some of them my from my treasured 20% list? Maybe I should work to move some of the 80% to the 20% so I can afford the loss?
credit cards - Nana, you can get a credit card! Get a Secured Credit Card. It's a Visa or MasterCard which is a hybrid of a chequing/credit card. There are two types: 1. You put in an amount that you would like to have as your credit limit in $500 increments as security and you you can either pay in full each month or make minimum payments 2. You can have a credit card linked to your chequing account and you can spend only has much as you have in your chequing account. I recommend #1 and they both go to improving your credit limit.
Re: What Franchisors Want From Franchisees - Thanks for the follow up Russell. I found the following tip to be especially helpful: [quote="RussellWebb":2vqd3szf]Financing arrangements will vary - if you can show that you have 20% above all of your start-up costs, this would help. The more assets you own the better.[/quote:2vqd3szf] By the way, is there a way for someone to achieve a close to "1000" credit score? I've always paid off my Visa bill and car payments on time... but I bet my credit score is not even between 800-1000. I wonder what the secret is to 1000?


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