I was a student on F1 visa from India in 2006. My CPA wrongly filled 1040 instead of 1040-NR and now I am trying to amend my 2006 tax return. He claimed educational credit.

1. I owe about $1600 to IRS. Could someone please help me calculating interest and
penalties? Is their any way to get waiver?
2. How much standard deduction can I claimed from India USA tax treaty.
3. I have worked on CPT as a regular employee. My employer paid me $1000 for unused
PTO on 1099-Misc. It was reported on Box No 7. What is the best way to report this? In
my wrongly filled return, Schedule C-EZ and SE are filled with $340 as an expense.

MukatA

1. Yes, you must file nonresident tax return. The U.S. India tax treaty allows you standard deduction of $5,350 (same as for the residents). Read Your U.S. Tax Return: U.S. Tax Treaties for Students and Apprentices

2. Your income is not subject to Social Security and Medicare taxes. If employer deducted these taxes, then send them email for the return of the taxes. Read about filing Form 843: Your U.S. Tax Return: Social Security and Medicare (FICA) Taxes for Non-resident Exempt Individual

3. You will report 1099-Misc income on schedule C-EZ. For you it is not subject to SE taxes. How you will treat the 1099-Misc income, read: Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor.

4. Now you will file amended tax return Form 1040X and a properly done nonresident tax return. May be IRS will not access any penalty if you file nonresident tax return on your own.
You can use the services of AtlantaTaxExpert (taxexpert@visataxes.com). He is one of the most experienced person to do non-resident tax return.

micky_577

Thans a lot for your response Mukta. Can i claim some expenses on 1099-Misc income to reduce taxable income?

Thanks

AtlantaTaxExpert

Yes, you can expenses on the Schedule C, as long as the expenses claimed are reasonable and directly related to generating the income reported on the Form 1099-MISC.