Hi All,
I need little help regarding tax filing.
Here are my details:
Came to USA on F1 in aug 2002;
Graduated in Dec 2004 and my Opt start from DEC 25TH 2004;
My H1 Started in Dec 5th 2005.

I filed 1040NREZ and 8843 for 2004 period.

For year 2005, for 11 months, am on OPT and for 1 month I am on H1B.
So I think I am in dual status. Please confirm me.

I think I pass the substantial presence test
2002-143 days,
2003-362 days,
2004-231 days, (jan -may went to home country)
2005-365 days,

Recently I contacted IRS they said I need to file 1040 NR EZ and 8843 for 2005 too.
But one of my friend says on dec 31 2005, U r on H1, so u r considered as resident so fill 1040 normal form.

I have following Questions:
1) Which forms I need to file in 2005?
2) I am a resident or non-resident?
3) In Jan 2005, I met with an accident and hospitalised for 2 weeks, I have insurance so it covered most of it. But from my pocket, I paid around 2000-3000$, Can I claim this during tax returns and get any benefits?

I appreciate if u clear my doubts regarding.

Thanks a lot in advance.

AtlantaTaxExpert

Sharathmsc:

You are technically dual-status, but if you filed as a non-resident alien (Form 1040NR/1040NR-EZ and Form 8843), the IRS would probably accept the return without question because the time you spent on H-1 is so short (less than 30 days).

You do not meet the Substantial Presence Test. The time (up to five years) you were under the F-01 visa does not count towards the Substantial Presence Test.

Sorry, medical expenses cannot be deducted from a non-resident tax return. even if they could, the deduction would be limited only to amount that exceeds 7.5% of your Adjusted Gross Income, and then only as an itemized tax deduction.

sharathmsc

Hey I couldn't get that Medical expenses thing, Can u be explain little more on that, Please.
I mean how to brief those expenses in Itemized deductions.
Thank you.

AtlantaTaxExpert

Okay, let's assume your Adjusted Gross Income is $50,000 and let's assume that you can already itemize even without the medical expenses.

To be able to itemize your medical expenses, you must exceed 7.5% of your AGI. In our sample case, that's $3,750. If your total medical expenses for the year was only $3,725, your itemized deduction would be zero!

If, however, your total medical expenses was $5,000, you could deduct $1,250 as an itemized deduction.

Hard to explain, but simple to show as an example!