Hello,

I arrived in the US in Aug 2001, been on F-1 until September 2005. Got my H-1 on Oct 1st 2005.
Joined Company A in May 2005 but their pay roll deducted my ssn and medicare taxes not considering my status.
Changed to company B in Dec 2005.
My questions are:
1)I am a non-resident right? I am not passing the substantial presence test.
2) Should I fill 1040NR or 1040 NR EZ? I have the bank interest statements but read that these interests need not be reported.
3) I am reimbursed by both the companies in the moving expenses. Should I report them? I think the w-2 box 1 includes these, right?
4) I have state taxes from TN,OH and CA. I am now in CA. Should I use the state taxes instead of standard deductions
5) Can I claim my ssn and medicare taxes? If so, how?

Please help...

Thanks a lot,

1) No, you are dual-status.

2) You file both. The interest earned from 1 Oct 05 on must be reported on the Form 1040.

3) The moving expense reimbursements is probably included in the Box 1 figure. Ask your employer. If so, then report the moving expenses using Form 3903, regardless of how you file.

4) Since Tennessee (TN) does not have a state income tax, you cannot have state taxes withheld for TN. If the combined state taxes withheld from Ohio and California exceeds $5,000, then claim them as itemized deductions instead of the standard deduction.

5) You cannot claim your SS and Medicare taxes as deductions.

1) No, you are dual-status.

2) You file both. The interest earned from 1 Oct 05 on must be reported on the Form 1040.



Does this mean that during F1 status, we don't have to report(pay tax for) the interest earned in saving bank accounts??

The earlier guidance was not accurate. You have to claim any interest earned in a U.S. bank.