[cpatel]

Hello,

For FY05, I am on F1, student from India.
Went for an internship (3months) from GA to CA.
Came back to school. Internship W2 shows breakdown
Of total wages with re-location re-imbursement.
Can I take deductions on moving expenses? I know I will
Have to file 1040NR instead of NR-EZ. But, it surely is worth it.

What additional expenses can I deduct? I had a car rental there..
Paid rent there and here (don't have receipts, except cheque copies)..

Thanks for your help.
Chirag.

[AtlantaTaxExpert]

Chirag:

Yes, you can claim relocation expenses.

However, the rental car is not an expense you can claim.

[cpatel]

Hello ATLTaxExpert,

thanks for your prompt response.
I did some reading and now have doubts about it.
May be you can clarify.

1) Do I meet the time test required for it?
I was there for 3 months, before and after I am a research assistant (1/3rd i.e. part time).. So, don't know how I meet time test.

Another thing I should have mentioned is: though there is a break-up saying X $ paid for relocation, everything is lumped in total wages. I think this is fine.. but, main issue is time test.

2) I can deduc two things, if at all: transportation of goods and travel (items 1 and 2 on Form 3093).. But, no receipts.. (I should have kept it.. ) Is that OK?

thanks again.
chirag.

[AtlantaTaxExpert]

Chirag:

You are right; I answered too quickly and failed to consider the time test. You cannot claim the moving expenses as moving expenses on Form 3903.

You may be able to claim the expenses as a business travel expenses. If you got paid on a Form 1099-MISC, then you can deduct these expenses on Schedule C. If you got paid on a W-2, you must fill in Form 2106. The total expenses are deductible only to the extent that it exceeds 2% of your Ajsuted Gross Income. Then, in order to claim the expenses, you must itemize your deductions.

[cpatel]

Hi ATLtaxexpert,

More ?s from me.. I am confused with the definition of GA part-year & full-year resident. I think I am a full-year resident but as you know was staying in CA for 3 months and then back to GA (total 9 mths). Am I correct for FY-residency? I need this for tax-credits from other state..

BTW, I doubt if business expense idea will work. To refresh, I am filing 1040NR (Indian citizen). Am a student.. putting my occupation as student on 2106 and making deductions won't be good!

Out of curiousity, you never mentioned if form 3903 (moving expense) can be filed without receipts or not.!

Thanks a lot.. you have been of great help.

Chirag.

[AtlantaTaxExpert]

Chirag:

You do not need to attach the receipts to the Form 3903. If challenged by the IRS, the receipts are the best proof. However, the IRS knows it costs money to move from one city to the next. If your expenses are not excessive, most IRS auditors will accept reasonable expense claims.

[datatriax]

Hi AtlantaTaxExpert/Cpatel,

Are rental payments in another city tax deductible? (same case assumed)?

J.

Chirag:

You do not need to attach the receipts to the Form 3903. If challenged by the IRS, the receipts are the best proof. However, the IRS knows it costs money to move from one city to the next. If your expenses are not excessive, most IRS auditors will accept reasonable expense claims.

[AtlantaTaxExpert]

Negative, because you have not yet established a "tax home" in the U.S. so the internship does not qualify as a temporary job assignment on which you can claim per diem costs such as rental payments.

[Avner]

Hi I am an international student on F1 Visa doing my masters. I have an internship for 6 months, during which I would be working full time and be paid by the hour. I would like to know if there are any tax benefits for students which would lower the rate at which I am taxed as I need to use the money earned to pay for my Tuition.

[AtlantaTaxExpert]

Sorry, but no.

The expenses for internships in another city different from where you are attending school CANNOT be deducted. This is especially true for an international student, becaiuse no TAX HOME has been established.

[pjane]

Hi,

I am a full time student in Texas on f-1- visa and went for an internship to California during the summer. My CPT period was only for 3 months and I completed that time with my full time employer. I had a moving expense of like around $800-$900.

Can I fill out 3903 for tax deduction? I read under the time test exceptions that "You are laid off or discharged for a reason other than willful misconduct". Since my CPT period was only for 3 months, it does count to be "discharged for a reason other than willful misconduct".

[AtlantaTaxExpert]

The time test is 39 weeks, which is 9.5 months. Three months is nowhere close.