[soori]

Great site for all of us.. thanks a lot

My case:-
Came to US in 2002 on F1, got my opt in feb 2005, and h1 in oct 2005, married and my wife ( was on F2, now on h4) doesn't work. Last year I filed 1040nr and 8843.

I tried using 1040NR as my previous year but ended up getting very little return.( net income:- 36750, individual deductions:- 5000, exemptions:- 3200+3200, so net taxable income is 25350, tax:- 3441 and tax paid was 3600, so return is only ~150):( :( hence I was thinking to use FIRST YEAR CHOICE OPTION TO GET STANDARD DEDUCTION OF 10000 PLUS exemptions:- 3200+3200 INSTEAD OF 5000 PLUS exemptions:- 3200+3200. But can you help how to file that and do I really get any benefit with that?

[AtlantaTaxExpert]

Soori:

If you are asking for my services, e-mail me at [email protected] so we can discuss it.

First Year Choice basically involves waiting until you meet the Substantial Presence Test, which for you would be in early June 2006. File an extension (Form 4868), then wait and file a normal Form 1040EZ.

You will get about a $1,500 reduction in taxes if you go with First Year Choice.

[soori]

Thanks for the reply..

I mentioned all my details.. how can I use first year choice and get 1500?
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AtlantaTaxExpert:-
File an extension (Form 4868), then wait and file a normal Form 1040EZ
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Is it 1040EZ or 1040R?

1.Do I have to send form 4868 before April 17th?
2. Does I really get some difference? As I metioned before right now using 1040nr gets only 200, how can I calculate tax using first year choice? Which form to use?
3.what are the 2 letters, is there any format/forms for them?

[AtlantaTaxExpert]

If you are single or married with no children, you can use Form 1040EZ. If you go online to www.taxact.com, you can calculate your taxes for free to determine what your refund would be as a resident alien.

Yes, send in Form 4868 before April 17th.

[soori]

Thanks for the reply...

Do I have send form 8843 also? For 2004 I filed Ohio tax online, for 2005 I am working for a chicago based company and all my w2 has IL address. How do I file IL state tax? Is there anything that I need that I need to take care during filing state tax as my status got changed..

Thanks again

[AtlantaTaxExpert]

If you are located in Ohio, file Ohio taxes. Where the company is based is irrelevant to where you file.

Look at the symbol in box 15 of the W-2. It should be "OH". If so, file Ohio taxes. If not, tell me what symbol is there.

[soori]

Thanks..

It is IL. How do I file state tax as my status got changed? DO I have to wait till JUNE for that too?

What about form 8843 which I filed last year.. also how can I get 1500 if I choose FIRST YEAR CHOICE...

Please help..

Regards..

[AtlantaTaxExpert]

You must file IL state taxes as if you were a U.S. citizen. There is no special status when it comes to state taxes. File as soon as possible.

If you file under First Year Choice, you will be filing as a resident alien, which means there is no need to file Form 8843.

If you file under First Year Choice, you get the personal exemption of $3,200 and the standard deduction of $5,000 for yourself and your wife, for a total of $16,200.

If you file as a non-resident alien, you get $3,200 for yourself, $3,200 for your wife and a $5,000 standard deduction.

So filing under First Year Choice gets you an additional $5,000 deduction, which results in an increased refund of about $1,115 on your federal tax return. There may be additional savings on your state tax refund from filing jointly instead of single with a dependent.

[soori]

Thanks a lot Tax Expert... right alias for u...


Even when I use FIRST YEAR CHOICE... do I have to file state tax right now(before April 17)? Or along with my federal one some time in June

Thanks

[AtlantaTaxExpert]

File your state return as soon as possible. The Substantial Presence Test does not apply for state income taxes. Non-resident aliens are treated the same as resident aliens when it comes to state income tax returns.

[soori]

One more question...

I am paying loan for my car.. ( around 320 /month) can I use that for any deductible?

Thanks

[AtlantaTaxExpert]

Negative. Interest on a car loan is not deductible.

[soori]

Thanks tax expert...
I heard that we can use our rental expences as deductible too... is that right?
I work for chicogo based company and I paid IL taxes, but live in MN working at client location.MY MN address is no where officially mentioned. I am getting a purdue of 5$/hr in paystubs ( mentioned as REIMBURSEMENT).I am living in same rental company over an year and they gave all of us some docs mentioning how much we paid as rent for whole year... how can I use it?

Please put your thoughts..

Thanks again

[AtlantaTaxExpert]

Soori:

Rental car expenses are deductible only if you are on a temporary work assignment of less than one year and you receive no per diem or reimbursement or the per diem/reimbursement is included in your taxable income.

If you are working there for over a year, the IRS will consider that a permanent work site.

[soori]

I am metioning about my Apt rental expences only...

Thanks

[AtlantaTaxExpert]

Does not matter; the apartment rental expenses are NOT deductible unless you are getting per diem to cover the apartment rental expenses and the per diem is taxed.

[wadherag]

Hi,

ATE, thanks for your help on another thread.

I wanted to know if I can go for First Year Choice - I came to the US on my H-1 on Dec 31 2005 (which got approved on Dec 22nd). Previously I was on F-1 till Dec 9th (vacation in between 9th and 31st).

My wife came with me from India on 31st.

In case I can apply, then I could get a $10000+$6400 deduction+exemption.

Please Advise.

[AtlantaTaxExpert]

Wadherag:

Unfortunately, The First Year Choice option is NOT available to you. In order to claim First Year Choice, you must be on H-1B status for 31 consecutive days while physically being located in the U.S.

Since you were on F-1 visa status until 9 December 2005, it is impossible for you to meet that requirement (and, yes, the IRS does check when you file a resident return under First Year Choice).

Sorry about that.

You should be able to claim your wife as a dependent on your Form 1040NR, but you will lose out on her $5,000 standard deduction.

[feiyuetpy]

I am in the similar situation. I was F1 from 01/01/2007 -09/30/2007, and started H1B from 10/01/2007.

If I use first year choice for 2007, can I still get my error withheld Social Security Tax and medicare tax back?