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adhole · Mar 22, 2006, 01:43 PM

Hello Atlanta Tax Expert,

My background:
I am student from Atlanta GA in 2005.
1. I am Indian
2. I was on F-1 whole last year 2005 (although H1 was approved)
3. Started H-1 from 1/feb/2006
4. I was a graduate assistant(TA) from Jan-May 2005, hence I have a W-2 from college.
5. Then I was working on OPT until Jan 31st 2006, hence I have 1099 Misc.

My Questions:
1. I read your posting and I think I have to file 1040NR and Schedule C-EZ. Is this right?
2. Can I show $2,500 as "student loan interest deduction" (Form 1040NR line 32) as I paid the amount to my parents in India(in the form of check, direct transfer to bank and some in cash)?
3. Do I qualify for $3,200 and $5000 standard deductions according to the treaty?
4. I am currently a resident in Atlanta, so wanted to know if I could have your contact number so that I could ask you some more questions if I have?

Thank you and hope to read your reply soon,
Ash

AtlantaTaxExpert · Mar 22, 2006, 09:21 PM

Ash:

1) Yes, that is correct.

2) No, you cannot. Payment of student loan interest to a family member is not deductible.

3) Yes, you do.

E-mail me at [email protected].

adhole · Mar 23, 2006, 08:27 AM

Thank you Atlanta Tax Expert

AtlantaTaxExpert · Mar 23, 2006, 09:49 AM

Glad to help!

adhole · Mar 23, 2006, 11:27 AM

Hello Atlanta Tax Expert,

I have another question:

1. An Indian student on F-1; Works in college has got W-2; which form should she fill? 1040NR-EZ or 1040NR?
2. I guess she also has to also fill 8843 and 500EZ(for GA state tax), am I right?
3. Does she qualify for exemption deduction(line 13 of 1040NR-EZ)? If yes then how much would it be? Her Wages and tips are $5414.00; Federal$306.70 and State $87.96

Hope to hear from you soon,

Thank you

AtlantaTaxExpert · Mar 23, 2006, 11:51 AM

She can file Form 1040NR-EZ. She qualifies for both the $5,000 standard deduction and the $3,200 personal exemption, which means she will get all of her federally withheld taxes ($306.70) back.

Yes, she should file GA Form 500-EZ. I believe she'll get all of her withheld state income tax back as well.

Yes, she should also file Form 8843.

adhole · Mar 23, 2006, 12:34 PM

Hello Atlanta Tax Expert,

Thanks for the quick reply, but as we did the taxes, it comes out that her taxable income comes around $2126 [after doing $5414 - 87.96(state income tax)-3200(exemption)]. And the tax on that income is $214.

So finally we get $92.70 [after 306.70(federal withheld) - 214.00]. Just want to ask you if this procedure we are doing is it right? If yes then it means she will not get $306.70 which is withheld.

Hope to receive your reply soon,

Thank you once again,
Ash

AtlantaTaxExpert · Mar 23, 2006, 10:48 PM

No, you forgot to subtract the $5,000 standard deduction (Indian nationals on F01 visa status can claim the stnadrd deduction under the U.S.- India Tax Treatym Article 21(2).

adhole · Mar 24, 2006, 12:34 PM

Thank you Atlanta Tax Expert, it helped me to figure out where I was going wrong.

I read Pub.910 page25 and 26 and then Pub.901 page 22(table7). I guess the 5,000 std deduction is applicable to me also as I was on F-1 the whole last year although I did OPT.

Thank you once again,
Ash

AtlantaTaxExpert · Mar 24, 2006, 01:54 PM

The $5,000 standard deduction is applicable to all Indian nationals who are on F-1 visa status, regardless of whether they were students, on OPT or CPT.

anishs · Mar 26, 2006, 05:54 PM

Atlanta Tax Expert - thank you for all the advice given here. Its been very helpful. I have a few questions I was hoping you could answer.
I was on OPT from March to Oct, Had my H-1 approved in Oct but stamped only in Feb 2006.

1. I am living in CA, I assume all the information given above about Federal Taxes applies to me as well?
2. I tried looking in Pub 901 (tables and India section) but could not find reference to $5000 standard decduction. Where can I find this information? Also - where in the 1040 NR EZ should I apply this amount? (Next to itemized deductions?)

Thanks and hoping to hear from you soon!

AtlantaTaxExpert · Mar 26, 2006, 09:51 PM

I am plagiarizing another post, but he said is so well, so...

Report as a standard deduction in line 11, enter $5000 in line 6 and report it on page 2 (section j), citing IRS Pub 519.

adhole · Mar 27, 2006, 09:07 AM

Thank you Atlanta Tax Expert for the confirmation.

I have to ask another question.

I have worked as student in college and my medical and social security taxes were withheld in 2004 and 2003. I did not file any return in 2005 as I did not know. But now as I read your posts I understand I should have filed 843.

1. Can I file 843 for last year 2004 and 2003?
2. What are the documents required to file them (I still have a copy on my W-2 for 2003 and 2004)?
3. Do I need to amend my last year taxes(also I think I have filed then wrongly)If so, how can I amend them?

Thank you,
Ash

AtlantaTaxExpert · Mar 27, 2006, 07:50 PM

Ash:

If you filed as a resident alien, you must amend your return to convert back to non-resident alien status. Note that the IRS does NOT have to approve this, but they will if it is clear you filed as a resident alien in error.

Once they approve your conversion back to non-resident status, then you can file Form 483. Download ITS Pub 519 and read pages 45 - 47 for the filing process.

djoser2001 · Mar 17, 2010, 11:43 AM

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