Hi,

I am an Indian citizen. I as on a F1 status till Oct 18th 2004 and then I got converted to a H1B on Oct 18th 2004. i do not pass the standard presence test. Correct me if I am wrong, but I guess I have been able to determine that I am a Non Resident Alien and not a dual-status nonresident alien based on the previous threads. So, Now the question is do I fill 1040NR or 1040NR-EZ. My question is should I file for standard deduction or for itemized deduction or both or do I have a option. I also understand that Indian Students have a special Tax Treaty with US.

labman

I would at least look at the 1040NR at http://www.irs.ustreas.gov/. Also the instructions for itemizing deductions. The one thing right about our insane income tax system is the relatively high standard deduction. For many people, the standard deduction is high enough that they are better off taking the standard deduction than itemizing. You are allowed to take which ever means the LOWER taxes. Go through the big things, state and local income tax, real estate taxes and interest if you own real estate, medical expenses, etc. You may also be able to deduct any taxes you have to pay to India. If you aren't close or above the standard deduction from a few bigger items, you would be better off forgetting it and filling the 1040NR EZ. If you have to fill out half the 1040 to decide if you you want to itemize, go ahead and finish it. I have filed it and taken the standard deduction for years. The forms are much the same except the long form has more options.

vikramanilrao

Thanks for the reply. That is exactly what I was thinking. I was planning to fill out both and see which one can get me more returns. Just that i was not sure if it is legal to fill out the one that gets you the maximum returns.

Also I wanted to confirm, given the fact that Indian Students have a US-India tax treaty Publication 519 , pg24, http://www.istaxes.com/supforms/p519.pdf), we cannot take a standard deduction AND a itemized deduction. Can We???

labman

No, you must take one or the other. I know nothing of the tax treaty, but it could allow you to deduct India taxes in addition to the standard deduction.

AtlantaTaxExpert

Vikramanilrao:

See my post from last night. I have requested an expert opinion from the National Association of Tax Practitioners on this issue, as neither the 2004 Instructions for Form 1040NR nor the Pub 519 specifically addresses how aliens who convert from F-1 to H-1 status should file their tax returns in the year of conversion.

Once I get the opinion, I will post a detailed synopsis.