10-04-2008, 08:39 PM
i read in the forum that someone mentioned J1 tax treaty, which is exemption from taxes for J1 scholars. This treaty has been signed by many countries which allows the exchange visitor to be exempted from Federal taxes for 2 years. However, the visitor continues to pay the state taxes and other withholdings. ALthough it feels good for 2 years, it must be carefully signed. Here is the catch. In case you happen to stay in the united states beyond 2 years, then IRS takes all the money you saved as fed taxes for the past 2 years. So plan before you sign the tax treaty with the human resource guys at the program. In case you want to still sign the treaty keep 200$ monthly in the piggy bank incase you need it for the 3rd year.