Hi everyone,

I would like to know the difference between 1040 and 1040NR. I was in OPT till sep 2008 and in h1b from oct 2008. I hear from my friend that for people from India and China, filing 1040 or 1040NR should not matter as they have a tax treaty that qualifies for the standard deduction.

Is it true that the standard deduction is the only difference between 1040 and 1040NR? Please help.

Thanks.

On F1/OPT you are exempt from residency for 5-years. You must file non-resident tax return Form 1040NR or 1040NR-EZ and Form 8843.

Your income is not subject to FICA taxes but you must pay federal and state income taxes. On your OPT income you will get deduction based on tax treaty between the U.S. and your country. Since you are from India, as per tax treaty, you will claim standard deduction of $5,450 instead of itemized deduction.
Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents (http://taxipay.blogspot.com/2008/03/us-tax-filing-requirements-for-non.html)