Have you Claimed your Tax Refund in USA?

Let’s forget about the effect of last year on the economy and think about this year: begin this year with Covid vaccines and then income tax refunds.

A stay abroad is always a great thing. You can get to know another country and its culture particularly well if you have a job. There are a number of ways to do this, including in the US. You can do an internship abroad here or combine travel and work if you decide on another J-1 program. The same applies in the USA as in India: You have to pay taxes. At first glance, it’s not that easy to see through American taxes. In addition to some similarities, there are also many differences between the USA and India in the tax system. As with us, the basis for calculating your final tax burden is the calendar year from April 1st to March 31st. While you work, you pay taxes, such as income tax. Tax types that you may encounter in your job in the USA are, for example, “federal taxes”, “state taxes” or “local taxes”. However, you may be able to get some of the taxes back through a tax return.

The main tax types

Income tax return in USA is not only paid to the federal government (federal tax), but – to a lesser extent – also to the respective state (state income tax). Exceptions are the states of Florida, Nevada, South, Texas, Alaska, Delaware, Washington, Dakota and Wyoming, where no state income tax is levied. So: the income tax is divided into

• the “federal tax” (to the central government in Washington)
• the “income tax” (to the respective state).

Some tips on US tax returns

• Separate tax returns are required for federal tax and state income tax.
• Many Indian deductible expenses are not deductible in the US
• No receipts will be submitted. Keep them at home anyway – this will help with spot checks by the tax authorities.
• In order to claim family members in the tax return, they must have either a Social Security Number or ITIN.
• Many Americans use software to do their income tax returns. That costs training time, then saves costs.
• Alternative: Commission a tax expert with your tax return. Only after a non-binding estimate of your tax refund will you decide whether to place the order.

In the US, just like in India, you can get a refund for taxes that you paid too much. How high this amount will be for you in each individual case can only be said exactly when you have the final tax assessment from the US authorities in your hands. Many shy away from the effort of filing a tax return, especially when you have to work with foreign authorities such as incorporate company in USA. So every year a lot of money remains in the hands of the state, which the taxpayers could actually get back! So that this doesn’t happen to you after your stay in the USA, you should take care of your tax refund.