Hello Atlanta Tax Expert,

I graduated December 2007, and worked from March 2008 with my OPT, then visa status is changed to H1B from October 2008. At the same time my wife's visa is changed from F2 to H4. But my company paid Social Security tax and Medicare tax.
In this case, since I am non resident, I should file form 1040NR.

1. For 2006 and 2007, my wife and I filed form 8843. For this time, some people say file form 8843, some say file form 8840, which one should I file, 8843 or 8840? Which one should my wife file?
2. When I file jointly, should I file W-7 for my wife for this time?
2. In order to get refund Social Security and Medicare tax, which form should I use?
3. On the W2, it only shows total SS & Medicare tax from March to December 2008. If I want to get refund SS & Medicare tax from March to September, how to calculate this portion of SS & medicare tax?

Thank you,

AtlantaTaxExpert

Okay, this is what you should do, in this order:

First, ask your employer for a refund of the improperly-withheld Social Security and Medicare taxes from Dec 07 to 30 Sep 08. The employer CAN get this money back, and he should have an incentive to do so, because HE gets money back as well.

If the employer refuses, then get the refusal in writing and submit Form 843 with the refusal letter, Form 8316 and the support documents listed on page 49, IRS Pub 519 (which can be downloaded from www.ird.gov).

Do the above IMMEDIATELY. It will take 2-3 months to get the refund, but you and your wife will have to wait until 1 June 2009 to file a joint resident tax return anyway (see below), so file the Form 843 packet NOW.

Once you have received the refund of the Social Security and Medicare taxes, then (and ONLY then) should you file jointly with your wife and you both CHOSE to be treated as resident aliens.

This will allow you to claim the $10,900 joint standard deduction plus two $3,500 personal exemption (for yourself and your wife). You will submit a notarized photocopy of her passport and the Form W-7 with the tax return to get an ITIN for her.

The downside is that you must WAIT to meet the Substantial Test before you can file, which means you must wait until about 1 June 2009.

If you file jointly with your wife BEFORE claiming the Social Security-and-Medicare tax refund, the IRS will use your joint filing as grounds to DENY the refund, even though there is NO LEGAL BASIS for the denial.

Get the FICA refund BEFORE you file jointly and the IRS should grant the refund no problem.

Since they are FLAT taxes, there are no calculations for Social Security and Medicare taxes on your annual income tax return, so the amounts withheld for Social Security and Medicare on your W-2 are irrelevent.