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handsome679 · Feb 6, 2007, 01:36 PM

Hi all, During 2006 - I was on:

Student (F-1) Visa - 1 Jan '06 - 4 Jan '06
OPT from 5 Jan '06 to 20 Dec '06, and
On H1-B from 21 Dec '06 to 31st Dec '06.

Which forms do I need to fill out. 1040EZ - NR or 1080? Do I still entiltle to get a Hope credit of 1500 USD as I am not very sure whether OPT student is eligible to get hope credit. If yes, then which category of forms do I need to fill out. Thanks in advance.

AtlantaTaxExpert · Feb 7, 2007, 11:13 AM

Form 1040NR-EZ, unless you are married. You CANNOT get any education credit or deduction using this form.

If married, you can file jointly with your wife and you BOTH choose to be treated as resident aliens for the entire year. In that case, you file Form 1040, 1040A or 1040EZ. You CAN get the education credit or deduction using Form 1040.

handsome679 · Feb 7, 2007, 09:16 PM

Thanks for your response.

Do you mean that all the rules and policies that apply to F-1 student applies to one who is on OPT?

I was on H1-B for a week in Dec '06. Do I need to fill out some extra forms for it.

I am single. Last year I and many of my friends filed Hope (education) credit and the forms involved were 8863, Substantial Presence Test Form, 1040A and we got the education credit of 1500 USD but we were not entitled to get personal deduction if we filed for educution credit. Please clarify!

AtlantaTaxExpert · Feb 8, 2007, 12:35 AM

Yes. OPT is considered part of your schooling, which is why the visa remains F-1.

You CANNOT claim the education credit if you file Form 1040NR or1040NR-EZ.

Just because the IRS accepts the return does NOT mean they filed correctly.

handsome679 · Feb 8, 2007, 09:25 AM

What could be the future consequences if we file an INCORRECT return and IRS accepts and honors that return.

I am particularly worried about the education credit that I received from IRS during 2006. Will in the near future, they will dig into my returns and will take appropriate action on it.

AtlantaTaxExpert · Feb 8, 2007, 04:21 PM

The IRS digging into your return and auditing you is a possibility, but it is not probable.

What is more likely is that it will have an adverse effect on your attempt to get a green card at some future date, because they WILL check your past returns then.

handsome679 · Feb 13, 2007, 09:02 AM

I beg to differ but I found something different on IRS website. Please advise what really should I do, I mean being a single, should I file hope credit?

------Compiled from the http://www.irs.gov/faqs/faq7-4.html----------

Who can claim the Hope Credit?

Generally, you can claim the Hope Credit if all three of the following requirements are met.

You pay qualified tuition and related expenses of higher education.
You pay the tuition and related expenses for an eligible student.
The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.

You cannot claim the Hope Credit if any of the following apply.

Your filing status is married separately.
You are listed as a dependent in the Exemptions section on another person's tax return (such as your parents'). See Who Can Claim a Dependent's Expenses, later.
Your modified adjusted gross income can not be above a certain dollar amount. This information is in Publication 970, Chapter 2. Modified adjusted gross income is explained later under Does the Amount of Your Income Affect the Amount of Your Credit.
You (or your spouse) were a nonresident alien for any part of the tax year and the nonresident alien did not elect to be treated as a resident alien for tax purposes. More information on nonresident alien can be found in Publication 519, U.S. Tax Guide for Aliens.
You claim the Lifetime Learning Credit for the same student in the same year. This information is found in Publication 970, Chapter 2.

AtlantaTaxExpert · Feb 13, 2007, 11:19 AM

Check out IRS Pub 519 for what you are and are not eligible for as a non-resident alien.

The IRS website is geared for U.S. citizens and resident aliens, so your citation above is not applicable to you.

handsome679 · Apr 2, 2007, 09:56 PM

I appreciate all your answers. I have one more question.

Your saying "What is more likely is that it will have an adverse effect on your attempt to get a green card at some future date, because they WILL check your past returns then."

My H1-B has recently been started in Dec '06 and my employer will file GC in a couple of months now.. and the complete processing will take years...

So my question is - Will they surely dig all my passed returns for all the years I am in USA or only for a few years.

Let's say, if they will dig all years returns then in what ways my GC processing could be affected knowing well that I filled in wrong forms (NOT INCOME/AMOUNTS) my mistake and was not a delibrate attempt.

AtlantaTaxExpert · Apr 9, 2007, 02:55 PM

ALL of your tax returns are consolidated on a database at the IRS. A complete printout of every return you EVER FILED can be requested by the INS as part of the GC process. At that time, they will discover that you filed incorrectly.

Will they give you the opportunity to correct the error? I do not know. They may, or they just deny you the GC because, in their eyes, you lied on the GC application.

WHY take the chance? Just amend the return and fix the problem!