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-   -   How to file dual status returns (https://www.askmehelpdesk.com/showthread.php?t=206051)

  • Apr 15, 2008, 07:38 AM
    dingbat3
    How to file dual status returns
    Hi,

    I was working in the states in 2007 (from Jan 01 - June 01) on an H1B and moved back to canada after June 01. However, after June 01, I maintained my U.S. brokerage account and actively traded with it -- generating U.S. income as a non-resident. My understanding is that I qualify for the filing as dual status. Here is my question:

    1) The instruction from IRS indicates that I should file 1040NR with a stamp indicating "Dual Status" and then supplement it with a 1040 showing only income generated while I was a residient. So should my 1040NR include income generated while I was a resident or should that be excluded?

    2) my income generated while I was a residient of the U.S. is less than the Roth requirements, however, if you include my u.s. income generated after June 01, I do not qualify for Roth. Can you advise on whether I can take advantage of Roth IRA in this case?
  • Apr 16, 2008, 10:51 AM
    AtlantaTaxExpert
    The dual-status return is NOT a return for amateurs! Get professional help.

    That said...

    1) All of the tax calculations are done on the Form 1040NR, so you show the income generated in the U.S. on the Form 1040NR.

    2) You cannot take advantage of the Roth IRA, because the post-1 June income is U.S.-soruced and must be included in the MAGI.
  • Apr 16, 2008, 11:52 AM
    MukatA
    If you were in the U.S. form Jan 1, 2007 to June 1, 2007 and you were not resident in 2006, then you will file nonresident tax return. You can not file Dual status return. Dual status means resident in the beginning of the year and not resident at the end of the year. Also there is no advantage if filing Dual status return-- you will still not get standard deduction.

    You should think again about the retirement investment unless you fully understand the implications to foreign aliens who may return back to their countries. If you withdraw it before you are 59 1/2 you will pay early withdrawal penalty.

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