To Atlantataxexpert

I have followed your posts on this forum and request your advice on my case. I am an Indian citizen working on H1B. My H1 started on Jan 6, 2005 and I was on OPT (F1) from Jan 1 to Jan 5, 2005, I was outside the US from Dec 5 to Dec 31, 2005. If I am not wrong, I pass the substantial presence test for 2005. Do I have to file returns as a dual status alien considering that I was on F1 for only five days of the year or can I file as a resident alien ignoring the 5days on F1? Would exercising the 'first year choice' option be more suitable? In which case are the returns typically more - resident alien filing or a dual status alien filing?

Thanks.

Suri:

File as a resident alien, filing Form 1040/1040A/1040EZ. You clearly meet the Substantial Presence Test and do not even have to go through the procedures associated with First Year Choice.

The fact that you were out of country for most of December 2005 is irrelevant.

Thanks for your advice atlantataxexpert.

No problem!

Your answer suggests that I am not a dual status alien for 2005. Then how should I account for the 5 days of Jan when I was on F1? Being on F1 I was an exempt individual and so cannot count these days towards the substantial presence test. Should I submit form 8443 as well? If I submit form 8443, will it not mean I am a dual status alien, in which case I think I will have to separate the income of those 5 days. I have a single W2 so it is not possible to split income for these 5 days. Also, does the India-US tax treaty provide me with any deduction apart from the $5000? I am all confused due to this dual status thing and appreciate your help very much.

Suri:

You are filing as a resident alien under the First Year Choice. It is an alternative to the dual-status filing.

There is a statement that should be attached to your tax return (see IRS Pub 519 for exactly what the statement involves). If you attach this statement, you will be 100% correct. Form 8843 will not be required.

However, to be honest, if you file just the Form 1040/1040A/1040EZ, the IRS will process the return and send you the refund and never question it.

Though a Form 8843 is technically required, in their mind, requiring a Form 8843 for five days is simply not worth the trouble. The IRS has bigger issues to deal with than requiring you to account for five days.

Trust me on this! File the Form 1040/1040A/1040EZ as a resident alien and get on with your life!

Thank you once again atlantataxepert.