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coolgal21 · Feb 10, 2006, 09:07 AM

Hello,

Here is my scenario -
I was on F1 student visa from Aug 2002-July 2005 and on OPT after that. I started my H1B visa on Oct 1 2005. I went to India for about 3 weeks in Nov-Dec 2005.
I have the following questions about my tax status -
1) Would I be filing the usual 1040NR-EZ and 8843 as I have done in the previous years?
2) I have also paid around 1550$ as interest on qualified student loans during 2005. Can I claim those as deductions in Line 9 of 1040-NR-EZ?
3)Do I qualify for the 5000$ std deduction applicable by Article 21(2) - India-US treaty?
4) Do I get a refund of the SSN and medicare taxes withdrawn during the last 3 months of the year on H1B status?
I look forward to hearing your views on my situation.
Thanks a lot!
Kritika

AtlantaTaxExpert · Feb 10, 2006, 10:28 AM

CoolGal:

1) You are a dual status alien for 2005, which means you have to either file a dual status return or wait until June 2006 to file under the First Year Choice. For 2006, you must file as a resident alien and file Form 1040/1040A/1040EZ.

2) You can claim the student loan interest under either the dual-status return or the normal return. You will not be able to use Form 1040NR-EZ, though.

3) Because you are an Indian citizen, you still get to claim the $5,000 standard deduction under either the dual-status return or the normal return.

4) No. You became liable for Social Security and Medicare taxes the day your H-1B visa was approved.

coolgal21 · Feb 10, 2006, 05:15 PM

Hello ATE,

Thanks for your reply. I had this follow-up question:

As I have been in H1B only for ~70 days in 2005 (Oct 1 to Dec 31 2005 - trip to India) and the previous 3 years in F1 visa do not count towards the substantial presence test, I should still be a non-resident alien for 2005.
Can you please clarify this? In case I still need to file as a dual-status alien, what are the forms I need to fill? (both 1040 NR and 1040?)

Thanks again!

AtlantaTaxExpert · Feb 10, 2006, 10:49 PM

Yes, in your case, a dual-status return consists of a Form 1040 to report all the income and a Form 1040NR prepared as an attachment to account for the income you earned while on F-1 status.