Dear Atlanta Tax Expert - I have been reading your advice on this forum and have a question of my own.
I changed from OPT to H1B in 2005 and now don't know which forms to fill.

01 Jan to Oct 13th - on OPT
Oct 13th onwards on H1B

I was a student uptil May when I graduated.
Which forms should I fill?
Which deductions can I use?
Can I deduct all my tuition fees - around $12000 for 2005?
Or Would I get more tax return if I did the standard tax treaty deduction? How much is it? Last year I deducted a standard around 7500.

Thanks,
Raj.

I am in the same situation. I want to deduct tuition fees paid in 2005, but can't do that as a NR.
My only question is: If I meet substantial presence test for 2006 (by taking an extension), and elect for the First Year Choice for 2005, can I choose to be treated as a resident alien for the entire year 2005? Or do I have to choose dual status for 2005?

Lifetime education credit is up to $2000, Hope credit is up to $1500.

But you can alternatively choose to get a $4000 deduction in addition to std deduction. Do you have to file as a resident alien in order to get that deduction? (i.e. it's not a credit)

Raj/Harshmodi:

You both need to wait until early June to file your tax return as resident aliens under the First Year Choice option. That way, you can claim the education deduction/credit.

You get the $5,000 standard deduction if you file as a resident alien.

Ray, you will be able to do ONE of the following:

- deduct $4,000 as an adjustment to income
- get the Hope Credit.
- get the Lifetime Learning Credit.

But NOT all three, or two of the three. Any tuition paid in excess of $4,000 is probably lost as a deduction UNLESS you can show the education improves to ability to perform your current job. They you can claim the excess as an employee business expense.