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    phantom's Avatar
    phantom Posts: 1, Reputation: 1
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    #1

    Feb 18, 2006, 03:34 PM
    Valid F1 status but resident (for taxes), country treaty
    Hi,
    I am a student in NY state originally from INDIA. I have a valid F1 visa. But this will be my 6th tax year in USA and I guess I am a resident for tax purposes.
    Because of my F1 status, I paid Social security and medicare only during the summer months.
    Rest of the year it is just regular withholding amount.
    Now my question is: Because I am a resident for tax purposes I probably will file a 1040 form (unlike 1040 NR form that I have been filing last 5 years)?
    If I file a 1040 form, can I make use of the treaty benefits? Every year, I deduct certain amount in addition to the standard deduction?
    Also I have been paying a flat rate of 35% for capital gains, since I am on F1 status. Does this change this year and can I pay regular % like other residents?

    Kris
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Feb 18, 2006, 05:00 PM
    Kris:

    Because you have exceeded the five-period allowed for the F-1 visa, you are a resident alien for tax purposes.

    That means you cannot apply any tax treaty exemptions (bad news).

    However, it also means you get the benefit of capital gains tax rates on staock transactions (good news).

    File Form 1040 for 2005 and henceforth!
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