Hi,

1. My OPT began on the 3rd of July and I started work in the 1st week of August on my OPT.

2. My H1B got approved in Oct 2006 and I am still continuing to work at the same employer now on my H1B.

3. Due to the lack of knowledge; my employer kept deducting H1B taxes from me even while I was on OPT (from Aug to Oct 2006).

I would like to file for tax returns this year and I would like you to help me understand how best I can do the same? What is the procedure? Where do I mention my OPT period and the start of my H1 and claim that I paid more in taxes in the months of Aug - Oct??
I would like to know what documents I would need as proof? Also what docs am I required to fill up?

Also, additionally I am of Indian origin and my pay is 60k per annum. Please help!!

Thanks,
Sonya.

Sonya:

Are you married? If so, you have the option of filing jointly with your spouse abd choosing to be treated as resident aliens for the entire year of 2006. You would file Form 1040, 1040A or 1040EZ.

If not married, you must file as a non-resident alien, filing either Form 1040NR or 1040NR-EZ.

The issue of your OPT is NOT mentioned in the filing of the tax return, regardless of how you file.

As for the improperly-withheld Social Security and Medicare taxes during the OPT period, you forfeit the right to ask for a refund of these taxes if you file jointly with your spouse.

If you file as a non-resident alien, you must FIRST request that your employer refund these taxes. When they refuse, get the refusal in writing, preferably on company letterhead. This is one of several support documents you will have to submit with Form 843 to request a refund of these improperly-withheld Social Security and Medicare taxes. See pages 42-48 of IRS Pub 519 for more details.

If you want professional help on these issues, contact me at [email protected].

Hi AtlantaTaxExpert and all others,

Yes; I am single and have been in the USA since August 2004. I would have to file as non-resident alien right?

Also, my question is what is my employer refuses to refund as well as give his statement in writing... will that mean I would have to forfeit my OPT tax return?

Another query... I recently got an email from school saying that we could apply for Tuition Deduction for Higher Education... I have completed my Masters in May 2006. Would I be eligible for the same?

And lastly; I would like to thank you for all the help and advice.

Thanks,
Sonya.

Sonya,

I answered your private message.

Here is some amplification:

You can file as a dual-status or as a non-resident alien. The non-resident alien is the best option in my opinion.

You will NOT be able to claim the education credits/deduction for 2006 because those credits/deduction are not allowed for non-resident aliens.

You MAY be able to claim the education costs as part of enhancing your work skills, but that is NOT likely because it appears that you got your present job based on you having a Master's degree. If so, the IRS will reject the deduction because the master's degree was a basic requirement for getting the job, not an attempt to enhance your job skills. Sorry!