[live2njoy]

Hi there..

Profusely thank the forum for the assistance.

I changed my visa status from F1 to J1 in June of 2005. I was in F1 status from 2002 to 2005 June. I was employed through the year. My total income on F1 status was 18,000 and on J1 status was 17,500. I have filed 1040NR-EZ forms from 2002-04 as I am single.

I need help with the following please,

1. what form do I need to file for 2005? Will I be considered NRA or RA for tax purposes or is it dual status? Can I claim exemption from substantial presence for both f1 and j1 status? Or do I have to use separate forms?

2. Can I claim tax deductions and exemptionsfor 2005 as well?

3. Am I liable to pay social security/medicare taxes for part or whole of the year?

Thanks a lot in advance for any assistance.

[AtlantaTaxExpert]

Wht was your job under the J-1 visa?

[live2njoy]

Residency training in j1 status.
Thanks for your help.

[AtlantaTaxExpert]

Live2NJoy:

1) You should file Form 1040NR-EZ for the income earned while under the F-1 visa. The income earned while under the J-1 visa is exempt from taxes, In my opinion, and you should request a refund of all taxes withheld while under the J-1 visa using Form 843. I assume you have a W-2 for the $17,500.

2) For the 1040NR-EZ, you can claim the personal exemption of $3,200. If you are Indian, you can also claim a $5,000 standard deduction. If not Indian, you may have a treaty exemption due to you.

3) In my opinion, you are exempt from Social Security and Medicare tax for the entire year.

[live2njoy]

Thanks for your input.

SS and Medicare taxes have been withheld from my j1 income so far. I guess I will request a refund as you recommend.

I was just referring to form 1040NR-EZ and it states that I should use this form to declare income under j1 as well? Please clarify if you can. And also, under J1 visa, I can claim exemption from substantial presence test, right?

Thank you.

[live2njoy]

Thanks for your input.

SS and Medicare taxes have been withheld from my j1 income so far. I guess I will request a refund as you recommend.

I was just referring to form 1040NR-EZ and it states that I should use this form to declare income under j1 as well? Please clarify if you can. And also, under J1 visa, I can claim exemption from substantial presence test, right?

Thank you ATE.

[AtlantaTaxExpert]

Live2NJoy:

When I said you were exempt from taxation under the J-1, I was making the assumption that you met the criteria of being either a teacher or a researcher who would be in the U.S. for only two years.

If that assumption is not correct, then you should be paying income, Social Security and Medicare taxes while under the J-1 visa.

[live2njoy]

Thanks for clarifying. Perhaps I may not come under your assumption. My training program by itself is 3 years under J1.

Now given this fact, could you briefly please re-answer for me how I need to file taxes for my f1 and j1 statuses for 2005

1. what form do I need to file (assuming I use 1040NR-EZ for F1, do I have to use a diff form for J1)? Will I be considered NRA or RA for tax purpose under J1? (can't I claim exemption from substantial presence for both f1 and j1 statuses?)

2. In my case, if I am liable for full income, ss and medicare taxes under j1, Is filing taxes under J1 similar to H1B?

3. Will I not be able to claim tax deductions and exemptions for 2005 for my f1 status (and J1 as well) ?

4.If I should pay SS/Medicare tax under J1, Can't I claim waiver for these taxes withheld when I was F1 status?

Sorry if my request is giving you additional work. I guess I am a little lost here. And again thanks a lot.

[AtlantaTaxExpert]

Live2njoy:

1) Given the length of your J-1 visa, I agree that you do not meet the exemption criteria. That being the case, you have two options:

- You can file as a resident alien for the entire year, since you meet the Substantial Presence Test. You can file Form 1040, 1040A or 1040EZ. You will be able to claim the Standard Deduction and claim the full range of tax credits available to any U.S. citizen. However, if you file as a resident alien, you will not be able to claim the waiver of the Social Security and Medicare taxes while under the F-1 visa.

- You can file as a dual-status alien. Unless you are Indian, this prevents you from claiming the $5,000 standard deduction, but will allow you to claim the waiver of the Social Security and Medicare taxes while under the F-1 visa by filing Form 843. The refund you will get if the IRS approved the Form 843 is about $1,377, but there is no guarantee that the IRS will approve it.

2) If you do not meet the criteria of being either a teacher or a researcher who would be in the U.S. for only two years, then, yes, you are taxed the same as a H-1B visa holder, meaning you must pay Social Security, Medicare and income taxes.

3 & 4) Answered in #1 above.

Don't worry about the extra work. It was my fault I answered with incomplete info.

[live2njoy]

Hi ATE..

Thanks for the reply.

Going by the info I have gathered so far, I probably have to dual file under dual status alien. Since I was on j1 at the end of the year, I will probably file with 1040/1040EZ along with a statement using 1040NR-EZ (will mark both forms as dual status alien). Furthermore, the following is my understanding, please corrent me if I am wrong.

1. I come from India and plan to claim personal exemption of $3200 and standardized deduction of $5000 for my income on F1 status as per treaty. I understand I cannot probably claim standardized deduction of $5000 as resident alien on J1 status since it is probably a duplication of the same allowance. But can I claim any itemized deduction for that status? Also, can I claim personal exemption of $3200 again for J1 status?

2. when I file for dual status using 1040, do I have to accommodate the final balance from form 1040NR-EZ anywhere? Or will the balances from the two forms remain separate and IRS will treat them as two independent payments. Also, are you aware of any samples available online representing income tax filed as dual status alien?

3. Can I claim any tax credits for income I will file as resident alien on J1 status?

Thanks again. Appreciate your time and effort.

[AtlantaTaxExpert]

1) You cannot claim both a standard deduction on Form 1040NR and itemized deduction on Form 1040; one or the other, but not both. If the itemized deductions exceed the standard deduction, then itemize!

Same with the personal exemption; it gets claims only once.

2) All of the tax computations are done on Form 1040 if your F-1 income is subject to the graduated tax tables on the Form 1040NR instructions. If you have income subject to the flat 30% tax, do those computations on Form 1040NR and add the tax to the figure on Line 44 of Form 1040.

3) As dual-status, you are only entitled to the credits specified on Form 1040NR.