[Lekha815]

Hi,
I am an Indian citizen. Arrived in US in Aug 2003, on OPT from Jan 2006 and on H1B from October 1st 2006. I started working in Feb 2006 in California. Throughout the year in 2006 Social security , medicare and disability taxes were deducted from my paycheck. Will I get a refund for these taxes for the time I was on OPT? If so, how should I proceed? Social security tax $3229 and Medicare $755. What percentage of these taxes should I request for a refund?

Since my H1B stared on October 1st should I be filing taxes as non resident alien using for 1040NR? In that case can I claim for standard deduction of $5000 as well as personal exemption of $3,300?

I got a new car , can I deduct the sales tax for it?

Thanks in Advance,
Lekha.

[AtlantaTaxExpert]

You need to file Form 843 to request a refund of the Social Security and Medicare taxes withheld while on OPT. The withholding when you converted to H-1B was correct.

If you are single, file as a non-resident alien for 2006. In 2007, you will file as a resident alien. If you are married, you have the option of filing jointly with your spouse and choosing to be treated as a resident alien for all of 2006. That makes ALL of your world-wide income subject to U.S. income taxes, however. Given your circumstances, though, filing jointly would probably be beneficial.

You CAN claim the sales tax if you file jointly, but it is likely NOT greater than the $10,300 standard deduction.

If you file as a non-resident alien, you cannot claim it.

If you file dual-status, you CAN claim it on the Form 1040 portion of the dual-status return IF you bought the car when you were H-1B. Probably not worth it to file dual-status over the simpler, more-immediate filing of a non-resident tax return.

[Lekha815]

I paid the H1B attorney fees... can I claim that as a part of legal expenses?

[AtlantaTaxExpert]

Yes, but only as employee business expenses, which are itemized deductions.

[dangdang]

Since he can get the social security and medicare tax back, why do you think that "Given your circumstances, though, filing jointly would probably be beneficial."? Can you explain it clearly? I am in the same situation too.

[dangdang]

You need to file Form 843 to request a refund of the Social Security and Medicare taxes withheld while on OPT. The withholding when you converted to H-1B was correct.

If you are single, file as a non-resident alien for 2006. In 2007, you will file as a resident alien. If you are married, you have the option of filing jointly with your spouse and choosing to be treated as a resident alien for all of 2006. That makes ALL of your world-wide income subject to U.S. income taxes, however. Given your circumstances, though, filing jointly would probably be beneficial.

You CAN claim the sales tax if you file jointly, but it is likely NOT greater than the $10,300 standard deduction.

If you file as a non-resident alien, you cannot claim it.

If you file dual-status, you CAN claim it on the Form 1040 portion of the dual-status return IF you bought the car when you were H-1B. Probably not worth it to file dual-status over the simpler, more-immediate filing of a non-resident tax return.[/QUOTE]

AtlantaTaxExpert,
I am not quite clear when you say that "Given your circumstances, though, filing jointly would probably be beneficial." Since he can get the social security and medicare tax back by separately filing, why file jointly? I am in the same situation, could you please explain it for me? Thank you

[AtlantaTaxExpert]

Filing jointly gives you a tax deduction of $16,900 in aggregate, and makes the taxpayer eligible for a number of credits like the Education Credit and the Child Tax Credit. Many people end up getting ALL of their withheld taxes back.

It is possible that the refund of the Social Security and Medicare taxes would be greater, but requesting that refund using Form 843 is NOT a guarantee that you will get the money. The IRS evaluates each request on its own merits, and sometimes they say NO!

The option to file jointly is vritually guaranteed to be accepted. So, if filing jointly produces a refund that is equal to the request for refund of FICA taxes, filing jointly is the way to go.

[feiyuetpy]

Does he have to extend to June 2007 to file as residant alien?

You need to file Form 843 to request a refund of the Social Security and Medicare taxes withheld while on OPT. The withholding when you converted to H-1B was correct.

If you are single, file as a non-resident alien for 2006. In 2007, you will file as a resident alien. If you are married, you have the option of filing jointly with your spouse and choosing to be treated as a resident alien for all of 2006. That makes ALL of your world-wide income subject to U.S. income taxes, however. Given your circumstances, though, filing jointly would probably be beneficial.

You CAN claim the sales tax if you file jointly, but it is likely NOT greater than the $10,300 standard deduction.

If you file as a non-resident alien, you cannot claim it.

If you file dual-status, you CAN claim it on the Form 1040 portion of the dual-status return IF you bought the car when you were H-1B. Probably not worth it to file dual-status over the simpler, more-immediate filing of a non-resident tax return.

[MukatA]

For getting back FICA taxes withheld during OPT, you must file Form 843.

Read about filing Form 843: Your U.S. Tax Return: Social Security and Medicare (FICA) Taxes for Non-resident Exempt Individual

[tax2010]

Hi,
I was working on OPT from August 2008 until March 31, 2009 (which is considered non-resident tax), I believe, so whatever taxes I paid, I get it back. (I paid only federal and state tax)

From April 1, 2009, I started working on H-1 Visa, is this considered as resident tax? (I paid federal, state, medicare, social security taxes)

Should I file two different tax forms to get my full taxes back that I paid when I was on OPT? I am single and I came to USA in December 2006.

I received only one W-2 form. How do I do this? What forms do I need to fill out?

Looking forward to hear back from you.

Thanks

[AtlantaTaxExpert]

You are operating under a misconception.

You ARE liable for state and federal income taxes while on OPT. IRS rules require you over-withhold on your salary, so you likely WILL get a refund, but it will NOT be a total refund. You ARE paying some federal and state income taxes.

You have met the Substantial Presence Test, but did not spend EVERY day in 2009 on H-1B status, so you must file a dual-status return.

The dual-status return is NOT for amateurs! Get professional tax help!