[sands]

Hai,
I am a new member. Please help!

My status in 2006:

Student on F1 (I am still on F1 with OPT) since August 2001
Attended school full-time until: December 15, 2006
Working on OPT from Dec 18, 2005.
My nationality: Indian

For 2006 tax purposes, I will receive one W-2 from school (I was an R.A.)
And
One 1099-MISC for the period Dec 18 to Dec 31st from my first employer

I shall be taking up regular employment with another employer from January 1st 2007

There was no withholding for the income on the contract work that I performed for two weeks

I know that I need to pay tax for income received under a Form 1099-MISC.

My questions:
1. Can I claim standard deduction since I have been in the US for more than 5 years?
2. What is the percentage of tax I need to pay for the income reported on 1099-MISC? ($ 4000 in my case)

Thanks in advance

Regards,
Sands

[AtlantaTaxExpert]

Sands:

1) Yes, you CAN claim the $5,150 Standard Deduction. Despite the F-1 visa, for 2006, you are considered a resident alien because you spent part of five successive years in the U.S. BTW, you were allowed to claim the standard deduction for income earned in 2001 through 2005 as well, even though you filed as a non-resident alien.

2) For the W-2 income, you probably did not have Social Security and Medicare taxes withheld because the job was with the university. Students working for the university are normally exempt from Social Security and Medicare taxes, regardless of their nationality.

However, you ARE liable for self-employment income for the Form 1099-MISC income (minus a $400 exemption) at the rate of 15.3%. Self-employment income represents the Social Security and Medicare taxes times TWO, because you are paying BOTH the employer's and the employee's share of the tax.

The self-employment tax is in addition to the income taxes owed and is calculated separately on Schedule SE.

I strongly recommend you get professional tax help! I am available. If you want to use my services, contact me at [email protected].

[sands]

Thanks David,

I have been claiming a standard deduction for my past filings according to the US-India treaty. I was just not sure if I would be able to do it this time around because I have been here for more than 5 calendar years (Aug 2001 to present).


I have sent you an email regarding this. Please respond.

Once again, thanks for you your help!

Best,

sands

[sands]

The email I sent you seeking professional help just bounced. Do you have another contact email address?

[AtlantaTaxExpert]

TYPO!

The e-mail is [email protected].

If that does not work, try [email protected].