[wootust]

Hi,

I have a question about the deductibility of IRA. I was in US under F1(OPT) for more 9months and H1B for another 3months. So, I have 2 choices whether I file as NR or file dual-status.

The problem is here: I would like to be able to deduct my IRA.
If filing as NR, I've read 1040NR instruction and found that I can deduct the IRA contribution if "Income Line 36 is less than $26,000". My income is far above that amount (53K).

Question: If I file dual-status, will I be able to deduct my IRA contribution (on the Non-NR part)?

Thanks very much!

[AtlantaTaxExpert]

You mis-read the instructions.

You cannot take the Retirement Savings Credit if your Line 36 income is more than $26,000.

You CAN take the IRA deduction with a $53K income. You will get the FULL deduction if you are NOT covered by a retirement plan.

If you ARE covered by a retirement plan, the deduction will be limited somewhat, but not too much.

[wootust]

You mis-read the instructions.

You cannot take the Retirement Savings Credit if your Line 36 income is more than $26,000.

You CAN take the IRA deduction with a $53K income. You will get the FULL deduction if you are NOT covered by a retirement plan.

If you ARE covered by a retirement plan, the deduction will be limited somewhat, but not too much.

Thanks for your reply.
Unfortunately, I've submitted everything (both federal and state) yesterday by mail. Could you please guide me how would I be able to amend my return? I saw in IRA website that there is a 1040X form.

- Can I use 1040X form to amend my 1040"NR" return filed to deduct the IRA (I'm going to buy IRA for full $5000 next week)?
- When I can file them (both state and federal)? Based on the mistaken return filed yesterday, I have to pay additional tax for state and eligible to get a small return from federal.

Thanks so much ArlantaTaxExpert

[AtlantaTaxExpert]

Yes, you can use Form 1040X to amend the Form 1040NR.

Unless you are OVER the age of 50, the MAX IRA donation allowed for 2007 is $4,000.

amend the return immediately. You have the copy of the return you submitted. The first return will be processed by the time the amended return hits the system.

[wootust]

Thanks so much!