[njconsultant]

Hi,

This is my situation. Icame to United States on July 2000 on F1 Status. On January 2005, my opt was started. I got hired by a NJ based consulting firm on May 2005 and started working/getting paid form June 2005. My Opt Expired on January 2006 and I am on my H1 B since then. I got only one W2 from my Employer which mentions only my federal and NJ state taxes (SDU/SDI) and does not include Social Sec and Medicare.

Now, my questions are as follows:

1) For the 2005 tax season, which forms I am supposed to file for Federal and State? Do I have to file 1040NR OR 1040 ? I believe I can not file for a 1040 NR since I have been living in the US for last five years? IS this correct? If so, Can I File 1040 EZ?

2) If I am living in US for more than five years, do I have to pay Social Sec and Medicare taxes for 2005, even though I was in OPT for the whole year? If I do, how I am going to do so as in my W2, there is no Social Sec and Medicare taxes are being cut for last year. (I asked my employer about this and they informed me as I was in my OPT, I don't have to pay those taxes, I have to pay SS and Medicare taxes once I started my H1, which will be 2006 year).

3) The exact date my OPT expired was January 20th, 2006. According to My I-94, My H1B is valid from January 1st 2006. The pay check that I got from my employer for the work that I did from January 1st 2006 to January 15th 2006, does not include Social Security and Medicare taxes. Is this correct? As my OPT expired on January 20th 2006, is it possible that my status will still be considered under OPT till Jan 20th of 2006, even though my I-94 say my H1B starts from Jan 1st 2006?

If you can help me on this, I would really really really appreciate that.

Thank you in advance for your time.

njconsultant

[AtlantaTaxExpert]

NJ Consultant:

Because you were in the U.S. for parts of five calendar years (2000 to 2004), your F-1 visa status no longer exempted you from being considered under the Substantial Presence Test. Hence, you must file as a resident alien. If you have no children, do not itemize, have no reportable interest or dividends, and make less than $100,000, you can file Form 1040EZ.

As for Social Security and Medicare taxes for 2005, your employer may be right or may be wrong; I'm not really sure. I am sure, however, that it is your employer's responsibility to get it right. As long as you properly informed them of your visa status and history, you will not be held liable for these uncollected taxes for 2005. The same logic applies for your first 2006 check.

[njconsultant]

Hi Again Atlanta Tax Expert,

Thank You So Very Very Much for your reply. This really helps. Just for FYI, I also did some research yesterday and on the IRS website I found

"......is the so-called "student FICA exemption", and it may operate to exempt a foreign student from social security/Medicare taxes even though he has already become a RESIDENT ALIEN. For employment which occurs after April 1, 2005."

Thus, I believe, I am good with this.

I have three more questions though.:confused:

1) In My situation, am I eligible for standard deduction? I am NOT doing itemize deduction.

2) I have no children, I do not itemize, I make less than $100,000 and I have a savings account from where I collected interest less than $200 last year. Can I still file form 1040EZ?

3) As I have mentioned before, I work as a consultant, therefore I had to leave NJ for couple of times and live in other states (e.g CA and MA) for temporary basis. My primary address (address that I gave to my employer) was NJ at alll the time. But I also had to rent apartments on those other states (as sometimes it was long term projects) and receive various bills (cable/electricity) and my bank statements in those addresses. So, Do I have to file different tax forms for all those states? OR If I file NJ-1040, that will be just fine as my primary address was in NJ all the time?

Once Again, THANK YOOU VERY VERY MUCH ATLANTA TAX EXPERT.

Sincerely,

njconsultant.

[AtlantaTaxExpert]

NJ Consultant:

1) Yes, you can claim the standard deduction.

2) No, any reportable interest makes Form 1040EZ unavailable. You must file Form 1040A.

3) If you rent an apartment, those states will expect you to pay taxes on your income earned in those states. However, if there is no paper trail (money withheld from your pay and sent to those states), they don't know to ask for the taxes. You should file, but if you do not, it is likely nothing will happen.

[njconsultant]

Thank YOU VerYY Veryy Much Atlanta Tax Expet! This really helps.. I really Appreciate your comments and this forum.

Sincerely,
njconsultant.

[AtlantaTaxExpert]

Glad to help!