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vargastominaga · May 16, 2008, 12:12 PM

I worked under OPT (F1) from Jan 07 until May 07. Then came back to the US as H1B in October 07 and never left the US and will meet the substantial presence test in 08 (currently on extension period). I'm planning elect the 1 year choice, how do I file my taxes for 2007? Can I file dual-status for 2007? Do I need to file two different forms (1040 and 1040NR?) one for the resident part and the other for the non-resindent part? I'm married with one kid, does that mena I can file Resident for the entire 2007?

PLEASE!!

Jorge

MukatA · May 16, 2008, 06:33 PM

You can file resident tax return as Married Filing Jointly after you complete SPT in 2008.
You will get standard deduction of $10,700 and exemptions for the kid if the kid is in the U.S.

You must both declare your worldwide income for 2007. If you have any foreign income, and on that income you paid taxes in the foreign country, then you can claim foreign tax credit.

You will complete forms W7 (application for ITIN) for your spouse and child and attach with your tax return.

vargastominaga · May 17, 2008, 10:21 AM

Thank you MukatA.

I worked from Jan.2007 until May 2007 under OPT, then went back home and came back to the US in October with H1B. Will I need to file Dual-status for 2007? What form/forms should I use?
One more thing. I filed form 843 at the beginning of 2008 to request refund on Medicare and SS taxes withheld in error by my employer under OPT in the first part of 2007. IRS returned my application requesting more papers and also indicating I need to file 1040NR for the time claiming.
Does that mean, If I file dual-status for 2007 and use FORM 1040, I won't get refund on taxes that shouldn't have been withheld in the first place?

Thanks

MukatA · May 17, 2008, 06:12 PM

You have two choices:
1. File a joint return as residents, as already explained.
2. File a nonresident tax return. You will get tax treaty benefit, as you have OPT income, depending upon your citizenship.

There is no advantage in filing Dual Status. About refund of FICA taxes, you file Form 843 separate from your tax return. Read: Your U.S. Tax Return: Social Security and Medicare (FICA) Taxes for Non-resident Exempt Individual

vargastominaga · May 17, 2008, 09:52 PM

Thank you one more time.

There is something that confuses me. I spoke with the person who is reviewing my 843 at the IRS and the lady told me if I file 1040 for 2007 (first year choice) I won't be able to get FICA back for the period I was on OPT. That doesn't sound very fair to me since those taxes shouldn't have been withheld in the first place. I told her that I was going to read about it and get back to her.

Please, any thoughts?

IntlTax · May 18, 2008, 09:55 AM

If you elect to file as married filing joint for the entire year, then you will owe Medicare and SS taxes for your earnings throughout the entire year. This would mean that you could not receive a refund on Form 843.

You need to assess the costs and benefits of making the election or not making the election.