Hi,

Am on L1 visa and been in USA/CA for 131 days during year 2007. Earlier while submitting W4 through my employer, as I'm married, I got 3 points for exemptions/allowances.

Though I started the tax file process sometime March 2008, but due to unexpected delay and issues from my tax consultant, I end up not filing before 15Apr2008. Later my tax consultants conveyed that this is OK, since I do not owe $ to IRS, rather expected refund, hence missing 15Apr deadline is not an issue.

My tax consultant now came back with a refund summary and it was not satisfactory:-(. I've some basic queries, hoping someone could help in this forum.

Query:

1. Given the brief status above, for 2007 tax file, am I not eligible for "3" points exemptions/"allowances"? Wouldn't this have an impact on my refunds? I'am married, and my spouse is a house wife(not working/dependent) and also has ITIN.

2. During year 2006, my stay in US was half that of 2007(63 days), yet my tax refund for 2006 was good.(compared to tax withheld amount). Was there any major changes for year 2007 tax file submission process, that potentially changes tax norms for foreign nationals? (I hail from India).

3. My consultant talked about Article 21(2) and said that's the cause for my low refund. I honestly don't know much about this article. So, does this article impact my case :-)?

Much appreciate your kind assistance.

Thank You,

Shanks

1. What you claim on W4 is not related to your actual deductions on your tax return. You were in the U.S. for 131 days, so you will file nonresident tax return. On nonresident tax return, you don't get exemption for spouse. You get personal exemption of $3,400. You can get itemized deductions.

2. For 2006 also you were nonresident. In 2006, you had income for only 63 days and had exemption of $3300.

3. L1 is work visa. There is no tax treaty benefit available.

Thank You for the clarifications, MukatA.

Extension query for #Q1.

Given that as a non-resident for FY2007, I'm eligible for personal exemption of $3400 and itemized deductions...

say, if my 2007 "Fed" withheld is $3900, "CA/state" withheld = $1100, what is approx refund check I can expect from Fed and State/CA ? I understand for actual figures, it might involve quite a few parameters, but on average calculations basis, what are refund amount that I can expect from Fed and State/CA, respectively?

Thanks very much,

Shanks

Shanks:

You need to tell us the following for us to determine your refund amount:

- what you EARNED in 2007 while in the U.S.
- what was WITHHELD for federal income taxes in 2007.
- what was withheld for STATE income taxes in 2007.

Hello Expert:

Thanks for offering help. Please find below indicative figures :

- what you EARNED in 2007 while in the U.S. : Reported W2 wages = $33000 (indicative)

- what was WITHHELD for federal income taxes in 2007: $3930 (indicative)

- what was withheld for STATE income taxes in 2007.: $1160 (indicative)

Thanks,

Shanks

Your refund from the IRS will be $57.

Thanks Expert.

It was quite surprising to know the refund $57 only. Probbaly there is something wrong in calculations.

In any case, I would like to thank you and MukatA again for all the help.

Thanks,

Shanks