Hi,

My situation is as follows:

I am an Indian citizen, and I have been in the US since Jan 1999. I have been an F-1 student until July 2004. I have been filing 1040-NR-EZ during this time.

Since August 2004, I have been on H1B. I also got married this year, and my wife is on H4, and she does not have any independent income. What filing status should use?

Married, filing jointly, or
Head of household

Thanks for your help.
Nigamanth
Cleveland, OH

I need the exact date in July you converted to H-1B status (date the status was approved).

If it was 3 July 2004 or later, then you do not qualify for dual status. In that case, file Form 1040NR and claim your wife as a dependent.

If it was 2 July or earlier, you are dual status. Read my posts on how to file dual-status.

Thanks for the reply.

My H1-B was approved on July 19. However, I have the following problems:

1. This is my sixth year of filing taxes in the US, so I am resident for the entire year, am I correct? This means that I should file 1040 and not 1040NR. Or should I consider myself non-resident since my H1-B came after July 3?

2. I have some income reported on a 1042-S. If I file 1040, where do I report this income?

Thanks for your time.
Nigamanth

Nigamanth:

As long as you were on F-1 visa status, you were considered an "exempt individual" and your F-1 visa time did not count towards Substantial Presence.

Without the Substantial Presence Test, you are not mandated to file as a resident alien.

Now, if you want to file as a resident alien, you have that option under the First Year option. But you do not have to file as resident alien. For 2004, the choice is yours. Starting in 2005, you have to file as a resident alien.

As to where income reported on Form 1042-S is put on Form 1040 depends on the nature of the income.

Thanks again. I want to file as a resident, because in that case I can file jointly with my wife. This is why I want to file the 1040.

The 1042-S income is Code 16 - "Compensation for independent personal services". Basically I earned this while I was on F-1 OPT, and was taxed at 30% tax rate.

I read the form 1040, and the instructions, and could not figure out where to include this income. Is it OK for me to do the following:

Report the income on line 21, and the tax on line 63?

Thanks for all your help!
Nigamanth

Nigamanth:

Do you have any deductions that you can claim to offset this Form 1042-S income, such as mileage or computer usage? If so, it would be better to use Schedule C to list the income from Form 1042-S and claim those deductions.

You would list the tax withheld on Line #63. Be sure to attach a copy of the Form 1042-S to your tax return.