[mrman]

Hi,

First of all a great service and a great site with loads of useful information.

Here is my scenario:
Dec 2003 to May 2005 - F1 Status
June 2005 to Sept 2005 - OPT (F1) Status
Oct 1, 2005 to Dec 2005 - H1B status

My company sent me to its branch in INDIA office for a special project starting October 13, 2005 till date.

I have two questions:

1. How do I go about filing the tax. I got my W2 form delivered to me by my company. How different is it while doing tax calculation for the period when I am on H1B compared to when I was on F1. If possible some links where I can get the Tax tables for both status.

I read your sticky post where it says persons who convert from F-1 to H-1/H-1B status too late in the year to qualify for the Substantial Presence Test have three options:

- They can be treated as a non-resident alien for the entire year.
<DOES THIS MEAN i do not need to treat F1 and H1B differently for year 2005 and can file as if i was on F1 for the entire year using the calculations i did in year 2004 also? If yes then do i need to fill out any other form with this?>
OR

- They can file as a resident alien under the First Year Choice.
<I really did not understand this part even after going through some other threads>



2. What difference will it make in the calculation for my not being physically present in U.S from October 13 to December 31, 2005 while my H1B started from October 1, 2005. Note that I was on PAYROLL throughout this period in the U.S office and was getting paid the normal U.S. salary.

Will wait for your reply. It would be great if you can supply some useful links which I could use for tax calculation.

Lastly, am I eligible for automatic extension since I am away from U.S. I might be returning back before April 15th but say some time in 2nd week of April but it will be tight for me to get everything in place and file it before April 15th. Also does it needs to be POST MARKED before APRIL 15TH or does the money needs to be transferred before APRIL 15th what's the deadline.
How do I file an extension any useful links for this too? Most of my friends back in U.S. suggested me to file an extension for this situation.

Thanks for your time.

Regards,
Dubey

[AtlantaTaxExpert]

Dubey:

YOUR QUOTE: <DOES THIS MEAN i do not need to treat F1 and H1B differently for year 2005 and can file as if i was on F1 for the entire year using the calculations i did in year 2004 also? If yes then do i need to fill out any other form with this?> Yes, this means you file as a non-resident alien (filing Form 1040NR or 1040NR-EZ for the entire year.

Since you intend to return to the U.S. you should plan on filing.

I have no links for you to use for calculating your taxes. The only software that I know of for non-resident alin filing is www.cintax.us, which does NOT do F-1 to H-1 conversions well at all. You probably need to do the tax return manually this year.

Assuming you have either an ITIN or SSN, you can file Form 4868 ONLINE at www.irs.gov. If you owe money, you need to mail a check by April 17, 2006, as the extension is an extension to file, NOT an extension to pay. If you know you will get a refund, then just file the Form 4868.

[mrman]

Well, Atlanta expert why would I need to do the calculation of F1 to H1.

If I am non resident alien for taxes then I need to do the calculation same as I did for last year when I was on F1 right?

Also, this brings one more interesting point. I read in one of the publications on IRS where it says that Non resident aliens are not required to pay Taxes on the income earned worldwide i.e. for any work done outside U.S.

Does this mean that I do not need to consider that amount which I earned during October 13 to Dec 31,2005 under taxable income even though I was paid in U.S (since I was working at the INDIA office branch during that period) ? Could you please reverify this for me?

If that is the case how do I put it into the NR-EZ form as my W2 has the income I earned for the entire year.

Thanks in advance.
Dubey

[AtlantaTaxExpert]

Dubey:

If you want to exempt the income you earned while in India (yes, In my opinion, that is permitted), you will have to file as a dual-status alien. That is NOT an easy return to do, so you may want to get professional help. If not, download IRS Pub 519 from www.irs.gov.

[mrman]

Thanks for the response once again. I went through the publication and
As per my understanding,

Dual status can be in 2 cases 1) iF one gets the GC in that tax year 2) If one passes the Substantial presence test of 183 days under a specific Visa category (H1B falls under that).

[AtlantaTaxExpert]

Dr Carter made it very clear that conversion to H-1B does not trigger dual-status.

Not sure about the Green Card. You may want to pose the question on www.thetaxguy.com and ask Dr Carter's opinion.