US Tax Filing For 2017 - H1B -H4 - L1 Visas Updates- Dates and Brackets

US Tax Filing 2017 – Updates, Deadline, Rates, e-Filing for H1B,L1, H4, L2

In Living in USA by Ruchika4 Comments

We have looked at topics on how foreigners like H1B, H4, L1 are classified for Taxation in US , including FAQs like Why File, Penalty.  In this article we will look at some important tax dates, the tax rates and related numbers that you may need to prepare your 2016 income tax return. These are the applicable numbers for the tax year 2016 – (income from January 1, 2016-December 2016).  The information is generic for all and applies to all foreigners on work visa like H1B, L1, etc…

Important tax dates  for year 2017 to file FY 2016 Taxes
April 18th , 2017 is the Tax filing deadline from IRS for filing taxes in 2017.  Below are various important dates from tax perspective to plan your activities.

DateTax Related Activity
January 1, 2017First day to file a 2016 tax return, though the IRS generally will not accept e-file and free file returns until the date below. Even paper based filings won’t be processed till later in the month
January 23, 2017IRS E-file to go live, allowing submission of electronic tax returns. Paper tax returns will begin processing from this date as well
January 31, 2017Date by which you should have received a W-2 from employers you worked for during the tax year.
If you worked for different employers during the year, get a W2 from all of them because you are most likely to get an IRS notice for not reporting W2 income on your tax returns.
February 16, 2017Financial institutions must mail out 1099-B, 1099-S and 1099-MISC forms by this date depending on income type like1099 for interest income from U.S. banks, 1099-B forms detail sales of stock, bonds or mutual funds, 1099-S forms for real estate transactions and1099-MISC forms for income such as rent.
April 18, 2017Tax Day* Last day for filing federal income tax returns and extension requests. Since April 15th is a Saturday and Monday is the Emancipation Day holiday, the due date has been shifted out to Tuesday, April 18th
Also, it is a due date for filing extensions for 2016 Federal Income Tax Returns.
Due dates for filing State Income Tax though it can vary by state. Also, if you worked for multiple employers in different states during the tax year, then you need to file state income tax returns in all those states in addition to the federal return in form 1040/1040NR as the case may be, depending on your residential status.
June 15, 2017U.S. citizens or resident aliens living abroad must file tax returns and pay any taxes due by this date (or file for a four-month extension)
June 30, 2017FBAR (Foreign Bank Account Report) forms due for taxpayers who have over $10,000 in total in foreign bank accounts at any time in the prior year. It is just for reporting purposes only. Remember, there is no extension to file this form.
October 15, 2017Last day to e-file a 2016 Federal Income Tax Return for Tax Extension. Note: you still need to file for an extension request by April 17th


2017 Income Tax Brackets or Tax Slabs

The amount of tax you owe depends on your income level and filing status like single or married.
US Tax Brackets for Single – 2017

Taxable IncomeTax Rate
$0—$9,27510%
$9,276—$37,650$927.50 plus 15% of the amount over $9,275
$37,651—$91,150$5,183.75 plus 25% of the amount over $37,650
$91,151—$190,150$18,558.75 plus 28% of the amount over $91,150
$190,151—$ 413,350$46,278.75 plus 33% of the amount over $190,150
$413,351—$415,050$119,934.75 plus 35% of the amount over $413,350
$415,051 or more$120,529.75 plus 39.6% of the amount over $415,050

US Tax Brackets for Married Filing Jointly or Qualifying Widow(er)– 2017

Taxable IncomeTax Rate
$0—$18,55010%
$18,551—$75,300$1,855 plus 15% of the amount over $18,550
$75,301—$151,900$10,367.50 plus 25% of the amount over $75,300
$151,901—$231,450$29,517.50 plus 28% of the amount over $151,900
$231,451—$413,350$51,791.50 plus 33% of the amount over $231,450
$413,351—$466,950$111,818.50 plus 35% of the amount over $413,350
$466,951 or more$130,578.50 plus 39.6% of the amount over $466,950

US Tax Brackets for Married Filing Separately  – 2017

Taxable IncomeTax Rate
$0—$9,27510%
$9,276—$37,650$927.50 plus 15% of the amount over $9,275
$37,651—$75,950$5,183.75 plus 25% of the amount over $37,650
$75,951—$115,725$14,758.75 plus 28% of the amount over $75,950
$115,726—$206,675$25,895.75 plus 33% of the amount over $115,725
$206,676—$233,475$55,909.25 plus 35% of the amount over $206,675
$233,476 or more$65,289.25 plus 39.6% of the amount over $233,475

US Tax Brackets for Head of Household – 2017

Taxable IncomeTax Rate
$0—$13,25010%
$13,251—$50,400$1,325 plus 15% of the amount over $13,250
$50,401—$130,150$6,897.50 plus 25% of the amount over $50,400
$130,151—$210,800$26,835 plus 28% of the amount over $130,150
$210,801—$413,350$49,417 plus 33% of the amount over $210,800
$413,351—$441,000$116,258.50 plus 35% of the amount over $413,350
$441,001 or more$125,936 plus 39.6% of the amount over $441,000

Deductions and Exemptions for Tax Filing in 2017 for year 2016

  • The personal exemption amount is increased to $4,050 this year as compared to $4,000 in 2015. Also, you are allowed to claim one personal exemption for yourself and one for your spouse, if married.
  • The spouse of a person on H1B visa can be treated as resident for tax purposes by filing a declaration along with the tax returns even though he/she is not living United States. The advantage of doing so is that you are able to claim additional spousal exemption on the tax returns which directly could result in additional tax savings

Standard Tax Deductions for  2016 to file in 2017:

Filing StatusStandard Deduction
Single$6,300
Married Filing Jointly$12,600
Married Filing Separately$6,300
Head of Household$9,300
Qualifying Widow(er)$12,600

Tax Credits for  2016 to file in 2017:

Child Tax Credit$1,000
 Additional Child Tax Credit$3000
Lifetime Learning Creditup to $2,000 per year
American opportunity tax credit$2,500 per eligible student

Changes in Appointment at IRS centers for Tax Filing Help : For 2017, you’ll need an appointment for in-person tax help at all IRS Taxpayer Assistance Centers (TAC) as compared to previous year’s first come, first served basis. This might save time at IRS. You can also find a location near you here:  https://apps.irs.gov/app/officeLocator/index.jsp

When to expect Tax refunds for 2017 filing: The IRS expects to issue more than 9 out of 10 taxpayer refunds in less than 21 days. The “Where’s My Refund?”(link https://www.irs.gov/refunds) and IRS2Go app (link https://www.irs.gov/uac/irs2goapp), is the best way to check the status of a refund. You can begin checking the status of your refund within 24 hours after the IRS has received your e-filed tax return or four weeks after mailing your paper return.

Update for 2016 tax year relating to credits: A new law requires the IRS to hold refunds tied to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15. The hold allows IRS to match information from forms W-2 and 1099 with information reported on tax returns to decrease the likelihood of fraud. This hold, together with bank processing times, means that taxpayers should not count on having those tax refunds back until the week of February 27.

Update for 2016 tax year relating to ITIN:
Documentation: Effective October 1, 2016, the IRS will no longer accept passports that do not have a date of entry into the U.S. as a stand-alone identification document unless the dependents are from Mexico, Canada, or dependents of U.S. military personnel stationed overseas.  Thus, now we are required to submit additional document depending on dependent age:

  • If under 6 years of age: A U.S. medical record that lists the applicant’s name and U.S. address.
  • If under 18 years of age: A U.S. school record that lists the applicant’s name and U.S. address.
  • If 18 years of age or older: U.S. school records, rental statement, utility bill, or bank statement that lists the applicant’s name and U.S. address.

Expired ITIN and Tax Filing : Under a new law, ITIN that has not been used on a federal tax return at least once in the last three years are no longer be valid for use on a tax return after Sunday, January 1, 2017, unless renewed by the taxpayer. Also, any ITIN with middle digits of either 78 or 79 (meaning 9NN-78-NNNN or 9NN-79-NNNN) will also expire on that date. Any taxpayers filing a tax return this season with an expired ITIN could experience return processing and refund delay as well as denial of some tax benefits until the ITIN is renewed.

For renewal ,applicants who need help can visit IRS.gov/ITIN, consult a Certified Acceptance Agent or Acceptance Agent or make an appointment at an IRS Taxpayer Assistance Center (TAC)

For further details and doubts visit: https://www.irs.gov/individuals/itin-expiration-faqs

Online Tax Filing Options for e-filing :
If you are filing first time and applying for ITIN, you cannot e-file your return. Most online tax services offer a free filing service if you’ll be using Form 1040EZ or 1040A. For free filing on simple federal, TurboTax, H&R Block, Tax Act, Free file (IRS) and e-file (IRS) are excellent options. TurboTax is the most widely used user friendly and headache-free option for federal tax return. Its free edition can easily be used if one has income of less than $100,000 and doesn’t have sizeable medical bills to deduct and doesn’t claim any rental, investment, or business income. H&R gives you easy face to face access to tax advisers if your taxes get complicated. However, they may NOT support Form 1040NR which you have to use as a non-resident alien for tax purposes

Any other topics that I have missed ?  Any questions ?

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Comments ( 4 )

  1. avi

    Hi,

    I got a job offer from a big semiconductor company in California non bay area. Base bay is 135k annual , i couldn’t negotiate as they are offering whole relocation from india to US also. With a family of four(spouse and 2 kids) i want to understand how good will be this. Bonus and rsu are extra but i heard they are fully taxed which is huge. If someone can tell me tax calculation in CA it would be helpful. Online calculators are really not helping as I don’t understand few concepts related to US taxation.

    1. administrator
      Saurabh

      Avi,

      Federal Tax: ~25% (slabbed)
      State Tax: ~9% (slabbed)
      Social Security: 6.2%
      Medicare: 1.45%

      So close to 40%

      1. avi

        Thanks Saurabh. I read few blogs online where they say if you have dependents then overall tax is reduced. Isn’t that right?

        1. administrator
          Saurabh

          Avi,

          What I have given are the tax slabs based on your salary. Your final tax will take lot of other things into consideration – filing status (married jointly), standard/itemized deductions, 401k contribution, FSA/HSA contributions, number of dependents etc.

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