[wootust]

Hi,

I have
F1-OPT valid from 1/28/2007 to 1/27/2008
H1-B approved on 9/1/2007 (I went back to home country and get H1 VISA issued 9/12/2007, came back, i94 entry stamp 9/25/2007). So now I have H1-B status

I planned to file
1) 843 SSN/Medicare tax refund
2) 1040, 1040NR tax return
3) 8843

Questions:
1) Do I have to file 8843 since now my status is H1-B not F1 anymore?
2) My non-resident alien status and the period that I don't have to pay ssn/medicare tax are from 1/07 to 1/08 (OPT valid) or 1/07 to 9/1/07 (H1-B approved) or 1/07 to 9/12/07 (H1-B VISA Issued) or 1/07 to 9/25/07 (First entry with H1-B)?
3) Do I have to file both 1040 and 1040NR?
4) If I have to file both, how can I divide the values in my W2 form?

Thanks very much

[AtlantaTaxExpert]

I assume you are single when I answer all of the questions below.

1) Yes, Form 8843 must be filed for 2007 ONE LAST TIME, because you will file either Form 1040NR or 1040NR-EZ for 2007.

2) Your non-resident alien status ended on 1 September 2007, the dated your H-1B visa became effective.

3) You CAN file both Form 1040NR and 1040 as part of a dual-status return, but you do NOT HAVE TO. The dual-status return is rather complex and should not be filed by a layman, but it will probably NOT result in any significant tax savings. In fact, you would probably pay the Same tax than if you filed as a non-resident alien (Form 1040NR or 1040NR-EZ), plus, filing dual-status would require that you wait until late May 2008 before you could file. In my opinion, it is NOT worth it, so file as a non-resident alien.

4) You would prorate the amounts, putting the pre-1 Sep 2007 amounts on the Form 1040NR and ALL of the W-2 amount on the Form 1040, then do the tax calculations on JUST the Form 1040. Like I said, the dual-status return is very tricky and NOT a return for the amateur.

[wootust]

Thanks very much ATE. So in conclusion, I just file 1040NR and put all of my income/tax withheld/expenses occurred over 2007 in 1040NR including the income/tax withheld/expenses that occured after I changed my status to H1-B?

Additional questions:
- What is the rule to determine whether dual-status can just file only 1040NR and do not have to file 1040?
- Usually, 1040NR has to pay more or less tax than 1040?

I appreciate for your help.

[AtlantaTaxExpert]

Yes, everything goes on Form 1040NR and the special Schedule A that comes with the Form 1040NR.

You will NOT be filing dual-status. SInce you converted to H-1B AFTER 2 July 2007, filing dual status is an OPTION for you, NOT a requirement. Had you converted to H-1B on or before 1 JULY 2007, then a dual-status filing would required for you.

As for whether Form 1040NR pays more or less than 1040, it varies from client to client. Much depends on what your home country is and WHERE in the U.S. you are working.

[MukatA]

AtlantaTaxExpert has explained in detail.
Yes, you did not complete 183 days on H-1B, you can file as non-resident, or you can file as Dual status alien but for that you must wait till you complete 183 days requirement in 2008. And filing as dual status alien won't save you much in taxes.

[wootust]

Thanks so much guys

[AtlantaTaxExpert]

Glad to help!