[mbh]

I have a 1099-MISC form from my employer. I was an F-1 visa holder under the OPT, work permit last year when I worked for two months. I have an amount in box 7 and zero for Income tax withheld. I gather, as a non-resident alien, I am filing 1040 NR, but I don't know where I am putting down this 1099-MISC amount? Is it to be filled where the W2 info is asked?
Will I be paying taxes for an income of $4500?

[AtlantaTaxExpert]

MBH:

What country are you from? Your answer will affect the calculations.

[mbh]

I am from India.
I am also paying back International student loan. Looking at Line 32 of 1040NR (if that is the form I am filing!), I am unable to figure this Student Loan Interest deduction worksheet. Last year (for the year before that), I got a refund and I am hoping that I will get a refund again this year.

Please advice on both the issues? Thanks.

[AtlantaTaxExpert]

MBH:

Since you are from India, you do not need to calculate the Student Loan Interest.

Your personal exemption ($3,200) and the standard deduction ($5,000) allowed by the U.S.-India Income Tax Treaty will exceed the $4,500 you earned on the Form 1099-MISC.

You must report the Form 1099-MISC on Schedule C, then transfer the dollar amount onto Line 13 of Form 1040NR.

Unless you have another job from which income tax was withheld, you will pay no tax, but you will also get no refund! Sorry about that!

[mbh]

Sorry, but what personal exemption and standard deduction are we talking about?

I just looked at the schedule C and it is for Profit and Loss from Business - I don't understand where to begin filling this form... what am I filling in this?

Student Loan - As long as I earn, like this (last) year, I get a refund on it - is what I was told by the IRS when I called... do I not? The 1040 Student Loan interest deduction worksheet asks me not to fill an amount more than $2500 but I paid $3733. How do I fill it? Or am I not filling anything?
Sorry, but its confusing and I need to talk to someone who can guide me through! Please advice!

[AtlantaTaxExpert]

MBH:

Okay, last year you got paid on a Form 1099-MISC where the employer did not withhold any money for any taxes. If no tax was withheld from your salary, then you cannot get a refund because, as a non-resident alien, you are not eligible for the Earned Income Credit.

The Student Loan Interest Deduction (which, again, you do not need if your total income is $4,500) is capped at $2,500 per year, no matter how much you actually paid in loan interest.

It would be easier for you to use Schedule C-EZ. You can download it from the IRS website (www.irs.gov) under "Form 1040 (Schedule C-EZ)". Fill in your name and SSN/ITIN on the top of the form. On Line A, put what you did to earn the money. Put "999999" in Line B. Enter $4,500 in Line #1 and #3.

Put $4,500 on Line 15 and Line 36 of Form 1040NR and attach the Schedule C-EZ to the Form 1040-NR.

On Line 37, put $5,000 for the standard deduction. Write to the left of Line 37 on the dotted line: "Standard Deduction Allowed under U.S-India Income Tax Treaty".

On Line 39, put $3,200 for the personal exemption.

Leave all succeeding lines blank!

Sign the return and mail it to the IRS Center, Philadelphia, PA 19255. Be sure to make a photocopy.

If you have any other questions, contact me at [email protected].

[mbh]

Thanks a lot! Sorry for not responding earlier, as I just checked the message. I shall follow this through. I will also be filing New York tax documents. I suppose even if I am not paying tax or getting refund I will still need to file the documents, right? Well, I am told it is the form IT203. Questions regarding that I shall mail you on the email address you mention. Thanks again!

[AtlantaTaxExpert]

Just opened your e-mail; will respond to it.

[mbh]

Hello, have faxed you the documents. Let me know you received them and have emailed the return fax number too. Let me know till when you can fax them back. Thanks!

[mbh]

Hi,
Thanks, I have sent an email in response to the IT203. Please check and please respond. With a work permit I was in New York only from April end to mid July. After that I was on a visitors vis, and travelling. Let me know.

[AtlantaTaxExpert]

Monica:

I will respond to the e-mail.