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    potter_harry's Avatar
    potter_harry Posts: 3, Reputation: 1
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    #1

    Apr 5, 2007, 06:50 PM
    Dual Status Filing, Exemption from Student Loan Interest
    I am eligible for a dual status filing since during 2006, I was in F-1 from Jan - Sept 30, and Oct1 - Dec 31 on H-1. I have couple of questions around that I want to confirm:

    1) On a dual status filing do I need to file an extension to make a Resident Alien election for 2006. If yes, I believe my first day of residency would be Oct-1, and only income after that will be eligible for resident alien ? Is this right.

    2) The reason, I want to go through filing as resident alien, is to make use of the $2500 exemption on Student Loan interest. Will, it matter when the loan interest is paid for the exemption i.e during the non-resident period ( Jan -Sept 30) or Resident period (Oct 1- Dec 31) ?

    3) Can I claim my wife as a dependent, if she was on F-2 till Sept 30, and on H-1B from Oct 1, but received no pay in 2006, and was on unpaid leave till Dec 15th, and her pay stub for Dec 15th- Dec 30th came in Jan 1st week. My understanding one's spouse with zero gross income in a year is a dependent?

    Thanks for your time,
    Regards
    HP

    Ps: I am a resident of India.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Apr 16, 2007, 01:15 PM
    1) Yes, an extension is needed. However, In my opinion, it would be easier if you just filed as a non-resident alien.

    2) You can deduct student loan interest whether you file as a resident, non-resident or dual-status alien. You are confusing the eligility for claim education credits/deductions; to claim those, you must be a resident alien.

    3) Yes, you CAN claim her as a dependent. However, it would be probably be more advantageous if you filed jointly with her and you BOTH choose to be treated as resident aliens for all of 2006.
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