J1 to H1 - tax issues

D

dendrite

New Member
Hi, I've been working in the US for a year on a J1, not subject to the two year home residency requirement. At the moment I don't pay US taxes, but apparently if I stay longer than 2 years I have to pay all the back taxes from the date of my initial arrival.

If I apply and get a H1B visa before the end of the 2 years, return to the UK (my home country), and then return on the H1B visa to continue work will I be able to avoid paying the 2 years back taxes ?
 
dendrite said:
Hi, I've been working in the US for a year on a J1, not subject to the two year home residency requirement. At the moment I don't pay US taxes, but apparently if I stay longer than 2 years I have to pay all the back taxes from the date of my initial arrival.

If I apply and get a H1B visa before the end of the 2 years, return to the UK (my home country), and then return on the H1B visa to continue work will I be able to avoid paying the 2 years back taxes ?
Click to expand...
Who told you that you had to pay back the taxes at all?
State taxes might be different. Did you pay any state income tax?
 
jzlthssw said:
Who told you that you had to pay back the taxes at all?
State taxes might be different. Did you pay any state income tax?
Click to expand...

According to the IRS website, if I stay a day over the two years, they want to whole lot back !

No problems with state taxes though - I live in Florida where they don't exist :D
 
dendrite said:
According to the IRS website, if I stay a day over the two years, they want to whole lot back !

No problems with state taxes though - I live in Florida where they don't exist :D
Click to expand...
I think it might be helpful if you can post the link.
 
dendrite said:
Here's the link
http://www.irs.gov/pub/irs-pdf/p901.pdf

Page 18 of this pdf document refers to the two year rule for people from the UK on a J1.
Click to expand...
My apologies! Looks like rules are quite different for you Brits! The treaty with my country doesn't have the 2-yr limit. My guess is that if you return to the UK and come back in another status you should be able to avoid the payback, because Pg 18 does say the exemption is "lost for the entire visit." Well, on THIS visit you DIDN'T exceed the 2 year right?

Well, I'm not a lawyer or accountant, nor did I stay at a Holiday Inn Express, so I suggest you consult a professional.
 
You must log in or register to reply here.
Top