Dear Tax Expert,

I am from China. My visa status is H1 from Oct. 1, 2005 and prior to that was F1.

I stayed in Minnesota from Jan. 1 to May 30 and in this period I earned some money as a Research Assistant. Then I moved to MA till now. I am married and my spouse is still holding F1 in MN for the whole 2005 tax year.

My question is:

1) For the federal tax return, should I combine the income from MN and MA together to file only one form or I file two separately?
2) For the state tax return, should I file them separately to MN and MA?
3) which form (federal) should I use?

Any info. Will be highly appreciated.

Thank you very much!

Monkey

Monkey:

1) Combine the income for the federal return.

2) For the state returns, file as part-year residents for both states. Report only MN-based income on the Minnesota tax return and MA-based income on the Massachusetts tax return.

3) You can file either as a non-resident alien (Form 1040NR) or as a resident alien (Form 1040/1040A/1040EZ).

Because the exemption specified in the U.S.-China tax treaty is the same as this year's standard deduction ($5,000), at face value the taxes paid should be the same regardless as to how you file. Assuming your wife already has a Individual Tax Identification number (ITIN), you can file the Form 1040NR as soon as you get the W-2s.

If you file as a resident alien, it would be under the First-Year Choice program, which means you would have to wait until early April 2006 before you could file. Further, filing as a resident alien would allow you to claim education credits (if you had to pay any tuition or fees in 2005) that are not available to you if you file as a non-resident alien. Finally, if you file as a resident alien, you would not have to file Form 4883 to account for your F-1 visa time in 2005.

I am available to prepare these returns for you. If you are interested, contact me at [email protected] for my fees(which are based on the forms filed).