[extraaapace]

Thanks for all the useful information that you all have posted here. I have a question. My statius changed from OPT to H1B in August 2005 and I am thinking of filing as a non-resident as per Atlanta Tax Expert's advise. My employer has also been deducting social security and medicare taxes since Feb 2005. If I file as non-resident do I have to request a refund of all the SS and medicare taxes that were withheld from my paycheck or only ask for a refund of the SS and medicare that was withheld while I was on OPT?I have used a software called CINTAX to calculate my taxes but it says that I need to PAY some amount ot the IRS even though my taxes have always been withheld by my employer. Am I missing something? Please advise. Thanks.

[AtlantaTaxExpert]

ExtraAapace:

The fact that you have to pay means you did not have enough withheld from your salary. I cannot tell you if you missed something without some salary figures and withheld tax amounts.

You can request a refund of the Social Security and Medicare taxes withheld while under the OPT, as long as you were on F-1 visa for less than five years. The form you use is Form 843. Download the form and IRS Pub 519 and read pages 45-47 for process and forms needed.

[extraaapace]

Thanks for the reply. Appreciate it.

My salary as calculated by the software is 47788, before the deductions, and the tax I have paid is 6509. This does not include the SS and medicare (2848+666) taxes that were withheld by my employer with whem I have been working since Feb 2005.

[AtlantaTaxExpert]

My calculations show you owe $50. That's assuming you are authorized to claim both the $3,200 personal exemption and the $5,000 standard deduction.

That, BTW, is what you want. Getting a refund is bad money management, since you are giving the U.S. government use of your money interest-free.

[extraaapace]

While moving for my new job I had also donated furniture, TV, utensils. clothes etc. to Goodwill and I have a form which says what I had donated ad the date (Feb 2005). The form/receipt does not show the value of the stuff that was donated. Can I put that down as a charitable donation? Where in the form would I put it?

Also as you mentioned, how would I know that I am authorized for the personal exemption and the standard deduction? I am a single Indian who was a student from Jan 2003 to Aug 2005 when my status changed to H1B. Is there anything else I need to make sure of?

Thanks for your advise. Its amazing how helpful and prompt you are.

[AtlantaTaxExpert]

You can claim the deduction for the donation only if you itemize your deductions.

It is likely that your $5,000 will be much greater than your state and local income tax withholdings, plus the charitable donation.

[extraaapace]

Thanks for that Atlanta Tax Epert. So you are advising that I should just take the personal exemption ($3200) and standard deduction ($5000) under the US-India tax treaty, and not mention the donation? I live in TX so I do not have any state Taxes.

Thanks for your help. You've really sorted out my confusion.

[AtlantaTaxExpert]

That is exactly what I recommend!

[amitg1980]

What does local income tax include?

[AtlantaTaxExpert]

Some cities and counties have income taxes.

That is what is meant my "local" income tax.

[extraaapace]

Hi again Atlanta Tax Expert!

To claim the $5000 standard deduction under the US-India tax treaty, do I have to file any other form besides 1040NR-EZ? Do I also have to file form 8833 to claim the exemption under the tax treaty? I am filing as a non resident alien as my status changed from OPT to H1 last year and I do not have enough days as H1 B employee in 2005 to file as a resident alien.

Thanks very much for your help.

[AtlantaTaxExpert]

If you file as a non-resident alien, the only form you have to file is Form 1040NR-EZ. You just need to state that the exemption is the standard deduction authorized under the U.S.-Indian Tax Treaty.

[extraaapace]

Do I have to file form 1040 NR-EZ or form 1040 NR? I read somewhere I may need to file form 1040 NR if I want to claim the exemption under the uS -India tax treaty. Please advise. Thanks a lot!

[extraaapace]

I had $71 in interest income last year which is not taxable I guess, which means I should be filing 1040 NR-EZ, not for 1040NR I guess. Please confirm if I am correct. Thanks.

[AtlantaTaxExpert]

If the interest is from a U.S. bank, then you need to claim it on Form 1040NR.