[bearnar]

Hi, I have a somewhat complicated question about my 2006 taxes...

I came to the US in 2001 on a student visa (F1). After I finished my degree I worked one year under OPT, and I left when my OPT/visa expired in May 2006 and went home to my native country and got a job there. So basically I worked 5 months in the US, and 7 months in the foreign country where I am a citizen.

Not sure if this makes a difference or not but; now I am actually back in the US on a fiancé visa and will marry a US citizen this summer and intend to permanently live here.

1) Do I file as a resident or non-resident? I was told by my university to file as a resident this year as I have used up all my exempt years (5).

2) Do I need to report my income from the foreign country on my US tax return? I have paid the necessary taxes on this income in that country.

3) If I need to report my foreign income and taxes, does that generally raise or lower my U.S. taxes?

[taxsearcher]

You definitely exceeded the five years because you exceeded the maximum period for being an exempt individual.

However, this just means that you start counting days toward the SPT in 2006. It does not look like you actually passed the required days to become a resident, so it seems to me that you stayed non-resident. You would therefore file a 1040NR and only report US source/effectively connected income.

[bearnar]

So even though I have used up all my exempt years, I still file as a NR? In 2006 I was only in the US for about 5 months, but prior to that I have been present most of the time. Does the 5 exempt years not figure into the SPT?

Thanks!

[taxsearcher]

When you calculate the SPT days, you don't use anything during which you were exempt. So you would start counting days from the beginning of the sixth year.

[AtlantaTaxExpert]

TaxSearcher has covered it brilliantly as usual.