Hi, my situation is quite similar with many people here.
I stayed in US as OPT from Sep. 2001 to May, 2005 and as H1-b from May, 2005 until now. And I am single. My questions are,

1) Should I report as dual-status for sure? or Can I report as a resident alien(1040) only?

2) For example, let's say I received $10,000 during OPT and $20,000 during H1-b. If I chose to report as dual-status, do I seperate my income on each form?

3) If I report as an resident alien, can I be a head of household? I am paying all the expense for living.

4) I am from Korea and I found the article regarding tax treaty.
"An individual who is a resident of one of the Contracting States at the time he becomes temporarily present in the other Contracting State and who is temporarily present in that other Contracting State as an employee of, or under contract with, a resident of the first-mentioned Contracting State, for the primary purpose of--(a) Acquiring technical, professional, or business experience from a person other than that resident of the first-mentioned Contracting State or other than a person related to such resident, or (b) Studying at a university or other recognized educational institution in that other Contracting State, shall be exempt from tax by that other Contracting State for a period not exceeding 1 year with respect to his income from personal services in an aggregate amount not in excess of 5,000 United States dollars or its equivalent in Korean won."

Does this apply to me? or does it apply only when I work for the person who is a resident of Korea?

5) Can I deduct the lawyer fee that I spent for applying H1-b as job-related expense?

6) Can I deduct all the expenses I spent for everyday lunch and subway fare for office? If I can, do I need every single receipt for them?

Sorry for a lot of questions, but please help me. Thanks!!

AtlantaTaxExpert

1) Your choices are dual status or resident alien under First Year Choice. You have been under H-1B too long to file as a non-resident alien.

2) On dual-status, you would report ALL of the income on Form 1040 (as that is where the taxes are calculated). You just account for the OPT income on Form 1040NR.

3) If you file as a resident and qualify for HoH, then you can file as HoH.

4) Based on your citation, it applies to you if you work for a Korean-based company or individual OR if you are attending a university. This treaty exemption basically gives you a $5,000 "deduction" on your Form 1040NR or 1040NR-EZ.

5) No. Private legal expenses are not deductible.

6) No, those are daily living expenses and are not deductible.

KJY

Thanks for your quick reply.
I came up with further questions about your reply.
1) Can I then report as a resident alien(1040) only?
3) When you say "qualify" for HoH, do you know specific qualification?
5) Isn't the lawer fee for applying for H1-B a job-related expense?
6) What is "meals, entertainment, transportation.....etc." for job?

Thanks again.

AtlantaTaxExpert

1) Yes.

3) Yes. You must have a child for whom you provided a place to live for over half of the year.

5) Maybe. However, to claim it as a job-related expense, you must first deduct 2% of your Adjusted Gross Income from the total of all job-related expenses. Then you must itemize on Schedule A. How much was the lawyer's fee??

6) NOT if the meals are just for you. To deduct the meals, you have to eat with clients, and then you can only deduct the client's meal that you paid for. Driving to and from work are commuting expenses, which are never deductible!

KJY

Wow, you are quick.
I have another question about your answer.
So, if I don't have any childern, I can't be a HoH at all?
But, when I filled out W-4, some one told me to check the box for HoH.
Do you think I filled out the form wrong?

Thanks a lot.