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harshmodi · Apr 11, 2006, 02:17 AM

Hi All. This is my first time in this forum.
Though I have read a lot of the threads, this question is still controversial.

I am on the same boat as a lot of the others. I was on OPT from June 27 to Sep 30, and on H1B from Oct 1 to Dec 31. However, there is a contradiction with the Sticky Note.

http://www.thetaxguy.com/residency.htm
This is Dr. Carter's page.

On this page, if you go to the dual status alien section, you will find this as an example of Dual Status Alien.

When you hold a J, F, M or Q visa during part of the year, but later change to an H visa or other status eligible to use the substantial presence test, and pass the test

This contradicts how the sticky note quotes Dr. Carter. I am very curious to answer the following questions:

(1) I paid school tuition in 2005. I want to take a deduction or an education credit for that. I earned less than 53k (or whatever) in 2005.
(2) Standard deduction.

It seems I can't get (1) unless I file as a resident alien, and I can't get (2) unless I file as a resident or non-resident alien. Is there any special provision for Indians in this situation (which I'm sure applies to a lot of people on the forum).

Comments/Suggestions welcome, especially from Atlanta Tax Expert in case I have missed some intricacy.
Thanks!

AtlantaTaxExpert · Apr 12, 2006, 07:10 AM

That is a contradiction, one I will address to Dr Carter after the end of the tax season. We are both too busy to address it now.

If you file dual-status (it IS still an option, but it is normally an unnecessary paperwork exercise when you can legally file either as a resident aliien under First Year Choice or as a non-resident alien if you do not qualify for the Substantial Presence Test), you can still claim the standard deduction under the U.S.-India Tax Treaty.

The ONLY way to claim the deduction/credit for tuition is to file as a resident alien.

meharpsingh · Apr 12, 2006, 07:25 PM

When would be the correct time to file as a resident alien under the present conditions the only difference being my H 1 started in 6 Nov 05.

Mehar

harshmodi · Apr 12, 2006, 08:03 PM

File after you have spent (183 - 1/3*(number of days as H1 in 2005 since 6 Nov 2005)) in 2006, assuming that you have been present in the US on all days after 6 Nov 05.

meharpsingh · Apr 12, 2006, 09:27 PM

Thanks for your reply... Are you sure about this... I mean I am not doubting your answer but I was of the view that it will be 183 days from the day I moved onto H 1. What is the amount of time (how many days?) I will get after applying for an extension. Also does anybody know that can I file my State Taxes even before I file my federal Taxes or will I have to hold onto the State Taxes as well.

Mehar

AtlantaTaxExpert · Apr 14, 2006, 09:30 AM

Mehar:

Harshmodi is correct. IRS Pub 519 clearly specifies that the previous year's (in this case 2005) days are decremented to onely one-third of the actual days spent on H-1B status.

meharpsingh · Apr 14, 2006, 11:38 AM

Hello ATE and Harsh

Please try to answer this question ASAP. Can I send my state return now(before 17th Apr) or will I have to wait (till I send Federal) for that as well. I have to attach a copy of my Federal Return with the State Return.

Thank you very much

Mehar

AtlantaTaxExpert · Apr 14, 2006, 10:24 PM

You can file your state taxes immediately. The states do not care about your visa status.