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croissant123 · Feb 2, 2006, 01:53 PM

TaxExpert,
We are in NYC. My friend worked under OPT for about 6 months in 2005 and then under H1B status.
Other than 1040 and New York State income tax return, which form should she file?

Thank you!

AtlantaTaxExpert · Feb 2, 2006, 02:55 PM

Croissant123:

Assuming she opts to file as a resident alien, Form 1040 is probably the way to go, because her NY state and NYC income taxes will probably be more than the $5,000 standard deduction. If so, she should file Schedule A with the Form 1040 in order to itemize.

What was her annual salary for 2005?

croissant123 · Feb 2, 2006, 03:30 PM

Originally Posted by AtlantaTaxExpert

Croissant123:

Assuming she opts to file as a resident alien, Form 1040 is probably the way to go, because her NY state and NYC income taxes will probably be more than the $5,000 standard deduction. If so, she should file Schedule A with the Form 1040 in order to itemize.

What was her annual salary for 2005??

(1) Her annual income for 2005 is about $35K so that the income tax won't exceed $5000.
I would like to know whether it's necessary for her to file 1040 along with 1040NR as statement since she was non-resident alien under OPT. And will she get any additional deduction by filing as dual-status?
(2) She changed jobs 3 times during year 2005 and got 3 W-2 forms. What she needs to do is add all the incomes and file one tax return to IRS and NYS/NYC Tax department. Am I correct?

Thank you very much!

AtlantaTaxExpert · Feb 2, 2006, 08:46 PM

Croissant:

If she files as a resident alien, she gets the $5,000 standard deduction. She can file as a resident alien under the First Year Choice, especially if she was under the H-1B visa for at least 183 days in 2005.

If she files as a dual-status alien, she gets NO standard deduction. The choice is obvious!

Yes, she should add up all three W-2s and file one tax return with the IRS and NY state.

croissant123 · Feb 3, 2006, 09:22 AM

Dear Atlanta Tax Expert,
Thank you for your advice, it's very helpful!
I would also like to find out what's the difference between Standard deduction and Itemized Deduction? Which one is better?

Thanks again!

AtlantaTaxExpert · Feb 3, 2006, 10:50 AM

Croissant:

If the total of all itemized deductions exceed $5,000, then she should itemize. However, at a minimum, she will get the $5,000 standard deduction if she files under First Year Choice.

Obviously, if her itemized deductions exceed $5,000, then she can choose whether to file as a resident or a non-residnet alien. The tax rates are about the same.