[garihc27]

I have a couple questions regarding Tax forms and deductions.

1. Currently I am on H1B and wife on H4, lived in the US for over 3 years now and hence I think we meet the substantial presence test and can file as resident alien.

2. Can I deduct 401K contributions

3. Can I deduct Healthcare Spending Account contributions

4. I read on one of the post that aliens do not have to pay taxes on the interest earned from a bank account in the US. Is this true ?

5. I am a citizen of India, can I take the tax-treaty benefit ? If yes, is this in addition of the standard deduction ?

6. under these circumstances which form should I file ?

Thanks in advance.

[AtlantaTaxExpert]

1) If you were H-1B for all of 2007, then, yes, you must file as a resident alien, either jointly with your wife or by yourself as Married Filing Separately.

2) Yes, but that should be done automatically by your employer. The BOX #1 wage figure on the W-2 should be LESS than the BOX #3 and #5 wage figure. The difference is reflected in Box #14 under Code D for "401K".

3) Yes.

4) Yes, but only for NON-resident aliens. YOU are a resident alien and must pay taxes on the interest earned in U.S. bank accounts.

5) Negative; you lost that benefit when you became a resident alien.

6) Either Form 1040, 1040A or 1040EZ, whichever applies in your specific case.

[garihc27]

Thanks for the quick reply AtlantaTaxExpert.

My employer did deduct the 401K contributions, but should I still report this say under box 53 on 1040 ? Similarly HSA were deducted by the employer, should I still report this under box 25 on 1040 ?

[AtlantaTaxExpert]

No on the 401K contribution. Such contributions are NOT reflected on the Frm 1040.

As for the HSA, maybe. You have to fill out Form 8889 FIRST, then transfer the resulting figure to Form 1040.

[MukatA]

For your Question 1, you need to provide more info to tell you when you can file as residents Married Filing Jointly. Also as a First Year Choice you will need to file a statement that you both want to be treated as residents.
When did you enter the U.S. and type of visa? When did you get H1-B?

[AtlantaTaxExpert]

Agreed.