I have been on H1 status from Jan 1 2005 through present. I think my tax filings will be pretty straight forward too. But I could not find any mails which spoke solely about H1 tax filing. (Or probably I just missed it, in which case my apologies).
I am a resident of MA. I came here in Aug 2002 on F1. Was on F1 till July 2004, then on OPT and H1 started on Jan 1,2005.
1. I would like to know what forms I need to fill for Federal as well as state?
2. For Social Security tax, do I need to fill a separate form?
3. Can I claim deduction on sales tax for purchases like a car in 2005? (Though the purchase price was only $500 and sales tax was 5%-about $25).
4. Can I claim for travel expenses, like trip to India (which I took in 2005)?

My understanding was that I need to fill form 1040-EZ and then the state form for MA. I also an doing a single filing.
Do let me know if there are any other forms I might need to fill.
Also, I was thinking on filing on my own instead of through a tax consultant, since I think my case is pretty straight forward. What is your opinion?

I would really appreciate all the help
Thanks in advance,
Sreeja

Sreeja:

1) You must file Form 1040, 1040A or 1040EZ. If you are single or married with no children and renting an apartment, Form 1040EZ should do. If you have children but are not itemizing, you use Form 1040A. If you are itemizing (which you should if you own a house and are paying a mortgage), then filr Form 1040.

2) Social Security is a flat tax withheld from your pay. There is no filing requirement.

3) Only if you itemize your deductions and the sales tax was greater than what you paid to MA in state income taxes (not likely).

4) No; that's considered a vacation and is not deductible.

The MA forms can be found on the state government website.

As for filing yourself, you can use any number of tax preparation websites. I recommend www.taxact.com. The software is relatively easy and rather cheap to use (cost for 1040EZ and MA form should not exceed $20).

Atlanta Tax Expert:
Thanks a million for your clear and prompt reply.

I think 1040EZ is the right form for me as I am single with no children.

Your answer helps me a lot. I will surely post in case of other queries.

Thanks again,
Sreeja

Hi Atlanta Tax Expert,

I have another question about filing. I changed my address recently and the address on my W2 is different from my current address. Do I need to fill up another form for the address change?

Thanks in advance,
Sreeja

Sreeja:

No, that's not necessary. They will adjust your address on their database when they get the return.

Hello Atlanta Tax Expert,

I came across this while filing my Federal tax on Taxact.com.

Did you receive a refund of state/local income tax in 2005 from the 2004 tax returns? Yes/No
If you itemized deductions in 2004 and claimed a deduction for state income taxes and received a refund of state taxes, you may have to include all or a portion of the refund as income this year. Generally, state tax refunds are reported to you on Form 1099-G.

Question: So last years state tax refund is considered as income too and will be added to my already existing wages?

Thanks,
Sreeja

Sreeja:

Probably not. For the 2004 tax year, did you file Form 1040NR and did you itemize? If the answer to both questions is YES, then the state tax refund is considered income on your 2005 tax return.

If you did not itemize (in other words, you claimed the $5,000 standard deduction due to you under the U.S.-India Tax Treaty), or you did not file a federal tax return, then the state tax refund is NOT counted as 2005 income.

Hello Atlanta Tax Expert,

I understand from reading some of the other threads that on H1 status, you can claim a standard deduction of $5000 and individual deduction of $3200. When I was filing my federal form on Taxact, it asked me if I wanted to file any itemized deductions. I anyway took the section, but did not have anything to itemize. At the end of that section, it displayed the following message:
You have just completed Schedule A. Your total itemized deductions are $1,733 and your standard deductions amount is $5,000; your standard deduction will be used on your return.

Questions:
1. Does this seem right to you?
2. What is personal deduction? I understand that it is general for all individuals on H1. What can I put under personal deduction?

Thanks,
Sreeja

Hello Atlanta Tax expert,

I have already filed my federal and state returns with Taxact.com. Please disregard my previous mail as I think I understand what the message meant. Just one last question I had:
I finished filing and received confirmation that my tax forms which were electronically submitted, have been received successfully. They have also attached forms 8453-OL (federal) and M-8453 (state) which I need to fill and mail once I receive IRS confirmation. However, they have asked me not to mail any W-2s or other documents.

Since this is my first time at electronic filing, I was surprised that I do not require to mail in my W2 to the IRS.
Is that the standard procedure?

Thanks in advance,
Sreeja

It is standard procedure not to mail in the W-2s. That data is sent electronically, so sending in the paper copies would be redundant.