[rajaijah]

HI,
I am a student from Russia currently on F1 visa. I will graduate this may and get my OPT from MAY 2008. I have found a job as a research technician and the employer will process J1 for me. I have few doubts and also need advice on few things.

1. I get my opt from may 2008 to next year. Should I work on my opt until may be dec 2008 and start my J1 from jan 2009. Anyway opt will go waste for me and doing it this way at least my J1 start date will be postponed. Any advantages/ disadvantages doing this.

2. I have been a student on F1 since June 2004. I have figured out I don't qualify for resident status (for taxes) when I am on J1 for 2 years . Do I still qualify for 2 year J1 exemption from fica taxes for 2 years? (or) my 5 years of exemption under F1 will negate the J1 2 years exemption.

3. end of 2008 how do I file tax return if I go from F1-OPT-J1. Just one 1040nr-ez will do bcoz I will be considered non-resident?

4. so far as a F1 student I am not taxed on interest from US savings bank account. Is it the same if I am on opt and J1.

6. Also, if I get capital gains or dividends from investments are they taxed?

I tried to get answers from previous posts but they don't relate to my country and so I am confused. Even anyone can answer few of them it would be of great help.

Thanks much.

[AtlantaTaxExpert]

1-2) The day your J-1 visa becomes effective is the day you start accruing days for the Substantial Presence Test, because the previous time on the F-1 visa INVALIDATES the two-year exempt period normally allowed to a J-1 visa holder. If you want to stay exempt in 2008, you need to remain on your F-1 visa while OPT.

2-3) If you stay on F-1 for the remainder of 2008, you will be a non-resident alien for 2008. If you switch to J-1, you will be a dual-status alien for 2008. The income taxes owed will probably be the same, but you will likely become liable for FICA taxes the day your J-1 becomes effective.
In 2009, you become a resident alien regardless of what your visa status is for 2008.

4) Yes, as long as you are on the F-1 visa.

6) Capital gains are taxed just like U.S. citizens. Dividends may be taxed differently, depnding on your visa status and the type of dividends.