It is Form 8843!

Thank you.

Quote:

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Originally Posted by AtlantaTaxExpert

It is Form 8843!

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Hi Atlanta,

Thanks again for helping people out here..

I was on OPT from Feb 05 to Oct 05 and then my H1 started from Oct 15, 2005.

- I understand from reading posts here that I can still file as a non-resident and submit 1040 nre and 8843. I have been submitting the same forms since on F1. Is that correct? What are the advantages of submitting as dual-status or as resident?

- Will I be able to take the $3100 standard deduction and the $5000 deduction I had been taking while on F1 due to tax treaty between P@kistan and USA. It looks like I can but I am not sure since I was working fulltime but was on OPT from Feb 05 to Oct 05. The tax treaty doesn't mention workers it just mention students. So while I was on OPT I am still considered a student?

- my current employer had been cutting medicare and SS taxes from Feb 05 to Oct 05. I understand I can get a refund on that. Right? Should I get the refund as part of my tax returns or that should be a separate request to IRS/employer. Will it have any impact on my filing as a non-resident.

Any advice would be greatly appreciated.

Falcon1:

1) There are no advantages to filing dual status. You effectively have to prepare two separate tax returns with no beneficial effects. Hence, you should file either as a resident alien (Form 1040) or as a non-resident alien (Form 1040NR).

If you file as a resident alien, it would be under the First Year Choice, which means you must wait until late April 2006 to file. Further, filing as a resident alien may cause problems in claiming the Social Security and Medicare tax refund by filing Form 843.

For these reasons, you should file as a non-resident alien for 2005 (you must file as a resident alien for 2006). You should also file Form 843 (see IRS Pub 519, page 46, for the procedures) to claim the Social Security and Medicare tax refund.

Be sure to request the refund from the employer first, and get the inevitable refusal in writing (it has to be attached to the Form 843).

Hi Atlanta

Thanks for the advice. Will I be able to claim the tax treaty 5000 deduction even though I was on F1 OPT for part of the year Feb 05 to Oct 05? How will it work out?

Thanks again

Hi Atlanta Tax Expert,

Had posted a few queries before and received your prompt replies. Thank You very much for that.

1) Wanted to clarify , If I file 1040 NR EZ am I eligible for 2 deductions on 1040 NR EZ
Line 11 : 5000 (clarified this with you previously)
Line 13 : 3000? (is that possible as a F1 student till Sept 30 2005 and then H1 from Oct 1 2005)
If so can you please confirm the amounts for year 2005?

2) If I file 1040 then I guess, I wouldn't be eligible for 2 deductions. Is that right?

Regards,

RB

Rahul:

1) Line 13 will be $3,200.

2) If you file Form 1040, you can claim $5,000 and $3,200 as well.

Thank you, Atlanta Tax Expert

Rgds,

RB

Hi,
I was on F1 visa till Feb, 01 - 2005 (on OPT) and was on H1 from February till NOW.
I am married and my wife is not working (She is on H4), which form should I file and what deductions should I get?
Thanks in advance

Shahsanket:

File Form 1040, Form 1040A or Form 1040EZ, which is easiest. You and your wife qualify as resident aliens.

You will get $6,400 in personal exemptions ($3,200 each) and a standard deduction of $10,000.

I'm not sure of my tax status, and maybe someone can help me.

I was in OPT from Jan 2005 to Nov 2005, and this is my 6th year as F1, so I guess for this period I'm resident alien. Then start from Dec 1, 2005 I'm in H1. So I don't know whether I'm dual-status or resident alien. Also wife is in OPT for the past whole year. Can she file jointly with me?

Hello,
I have simillar problem but bit different.

Here is the scenario:

I was on F1 status(on OPT) in the beginning of the year 2005 and was in North Carolina. On 8th feb I moved to California to find a job and got job over there as a independent contractor. So I was on 1099MISC but still as a student on OPT. No tax got deducted from my paycheck(none -no federal, no state, no medicare and no social security) till 26th sept 2005. I worked there in California and received 20,000$ on my 1099Misc. On 26th September my status got converted to H1b and I moved to Arizona. So I am on w2 now and all regular taxes got deducted from my paycheck. I earned 25.000$ from 26sept 2005 to 31dec 2005.

Now my questions are

1. what is my residency status( resident, non-resident or part year resident) for tax filing purpose? (I changed 3 states and 2visa status during 2005). Do I have to file with dual status?

2. which forms to file for federal income tax purpose? (1040NR, 1040, 1099MIsc or 1040 with schedule C).

3. where do I provide info regarding my OPT status and in which form? As I have to pay only federal and state tax for California.(remember I didn't pay any tax on 1099MISC while I was in california)

4. which state tax forms to file? What I mean by that is do I have to file any part year resident form?
Please let me know the answers as this is bit different situation and I am very much confused.

Thanks in advance,
Ankit

Ankit:

I answered your question on the other post!

Talich:

You need to file as a resident alien, because once you hit the five-year mark, your exempt status for the Substantial Presence Test no longer applied.

Yes, your wife can file jointly with you as a resident alien.

Hi Atlanta

This is significant news for me as I thought as long as one is in F1 status, he/she is counted as non-resident.

My 7th year in F1 status started in Aug05 but ended in Oct05 when my H1 started. I will defnitely be considered a resident? Right?

And I can't claim the tax treaty deduction now right?

Are there other deductions I can claim besides the 3100 personal exemption?

Do the SS and medicare taxes that were cut while I was on OPT/F1 have to do with this 5 year limit?

Unfortunately, most people do not bother to tell me how long they have been on F-1 status, so I normally assume it is under five years. If I mis-advised you, you have my apologies.

If you were in your 7th year of F-1 status,then, yes, you definitely qualify as a resident alien. If so, you probably cannot claim any tax treaty exemption.

You can claim a $5,000 standard deduction.

You start paying Social Security and Medicare taxes once you finish the fifth year of your F-1 status.

Hi Atlanta,

I am reading the 519 publication and it says that for substantial presence test, one has to be in US for at least 31 days during the current year and 183 days during the 3-year period that includes the current year and 2 years immediately before that.

Does that mean if one willl be a resident after 5+2 years ?

When does the dual-status or first year choice apply?

I couldn't find the 5 year F1 visa limit in the publication. Can you let me know where I can find more information on this.

Falcon1:

Yes, after 5 years on F-1 visa, then two successive years, you will become a resident alien under the Substantial Presence Test. Dual-Status applies in the year the 60th month ends and the 61st month begins. You can do the First Year Choice at that time.

You will not find the 5-year limitation in IRS Pub 519. The issue has come up in the past several years, so I know from experience that the five-year rule applies. If you do not want to take my word for it, you can ask on the forum on www.thetaxguy.com, which specializes in tax returns for aliens. That is where I learned about the F-1 visa 5-year limitation.

Thanks a lot Atlanta. You are really a great help!!

This would take care of the Federal Tax part but what about State Taxes? Would I have to continue to file the form N-15, Hawaii Nonresident and Part-Year Income Tax return? Please advise.

Quote:

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Originally Posted by AtlantaTaxExpert

Sudfromhawaii:

Refer to page 9, IRS Pub 519 (which can be downloaded from www.irs.gov as a .pdf document) for details about First Year Choice. Please note that the IRS Pub 519 that is online is for 2004, but the provisions have not changed, so you need to add a year when you read about what to do in which year. i.e., read "2003" as "2004, and "2004" as "2005".

You must effectively be under your H-1B status and physically present in the U.S. for at least 183 days before you can file Form 1040. In your case, that would be sometime around 4 April 2006, which means you probably do not have to file for an extension. You will need to add the statement specified on page 9 of IRS Pub 519, and you would also need to file Form 8863 for whichever education credit you qualify for (see chapter 35 of IRS Pub 17, also downloadable) for details on the Education Credits.

As for accounting for your F-1 status, you claim income earned during the F-1 status on the Form 1040.

You will need to file Form 4883 one last time for 2005.

Your exemption from Social Security and Medicare taxes while on F-1 status still stands. Filing as a resident alien has no effect on that exemption.

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Stud:

You have to file the Hawaii state tax return as if you were a resident, regardless of how you file the federal return. If you were in Hawaii for all of 2005, file as a full-year resident. Otherwise, file as a part-year resident.

BTW, I made an error of your First Year Choice computation. I counted your entire 2005 H-1B time on a day-for-day basis. You must count 2005 time on a 3-day-for-day basis (you can only count one-third of your 2005 days for the Substantial Presence Test), which pushes your 2006 filing date to early June instead of early April. So you will have to file an extension after all.

Still, In my opinion, filing as a resident alien is the way to go!