Hello,

Here is the scenario:

I was on F1 status(on OPT) in the beginning of the year 2005 and was in North Carolina. On 8th feb I moved to California to find a job and got job over there as a independent contractor. So I was on 1099MISC but still as a student on OPT. No tax got deducted from my paycheck(none -no federal, no state, no medicare and no social security) till 26th sept 2005. I worked there in California and received 20,000$ on my 1099Misc. On 26th September my status got converted to H1b and I moved to Arizona. So I am on w2 now and all regular taxes got deducted from my paycheck. I earned 25.000$ from 26sept 2005 to 31dec 2005.

Now my questions are
1. what is my residency status( resident, non-resident or part year resident) for tax filing purpose? (I changed 3 states and 2visa status during 2005). Do I have to file with dual status?

2. which forms to file for federal income tax purpose? (1040NR, 1040, 1099MIsc or 1040 with schedule C).

3. where do I provide info regarding my OPT status and in which form? As I have to pay only federal and state tax for California.(remember I didn't pay any tax on 1099MISC while I was in california)

4. which state tax forms to file? What I mean by that is do I have to file any part year resident form?

Please let me know the answers as this is bit different situation and I am very much confused.

Thanks in advance,
Ankit

Ankit:

1 & 2) See my previous posts which shows three options (resident, non-resident, or dual-status). Regardless of which form you file (Form 1040 or 1040NR), you will have to file Schedule C. You may have to file Schedule SE.

3) Now, if you file as a resident alien, you do not have to include information about your visa status. If you file either dual-status or as a non-resident alien, there are sections of the Form 1040NR where you report your visa status.

4) As for state taxes, you owe taxes to California and Arizona (and possibly North Carolina) for income earned while in those states. You can access the state government websites to get the necessary tax forms.

In my opinion, you need to file either as a dual-status or as a non-resident alien. If you file as a resident alien, you would owe about $3,000 in self-employment taxes alone. The SE tax is not an issue if you file either dual-status or non-resident alien.

Thanks for your reply. But still I have one doubt. If I file 1040NR where do I put my 1099MISC. I don't see any field with schedule c or schedule SE.

Again Thanks a lot!

Sorry I found it in 1040NR, I was looking at 1040NREZ. But for filing schedule c I have to file 1040 and it doesn't take in to consideration my student status. So I will have to pay all taxes. So what should I do?

Ankit:

You can fill in the Schedule C and attach it to the Form 1040NR.