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jjlex · Apr 14, 2008, 11:56 PM

I'm newbie to tax filing. I have two questions when I'm reading U.S. Tax Filing Requirements for Non-Residents I hope I can get help from you! Thanks in advance!

Question1:

Filing Form 1040NR or 1040NR-EZ
For the federal tax return, a nonresident must file Form 1040NR or 1040NR-EZ. On the nonresident return, you will only get your personal exemption, itemized deductions and other deductions as per tax treaty. Most common itemized deduction is state income tax withheld from your paycheck. (Note: For some countries, the tax treaties allow them to claim exemption deduction for spouse (if spouse did not have any income in the year) and for children. One such example is India.)

I don't understand the words colored in red. If the spouse did not have any income in that year, as I understand, he/she would have to pay $0 even if he/she is not exempted from paying tax. Then the question is why would people claim for exemption when they don't have income? If there's no necessary for people without income to claim their exemption, then why the "law maker" made this into the law? Or am I just misunderstanding these words?

Question2:

Form 8843
If you are an exempt individual, and you are not required to file the tax return, you must file Form 8843 alone. If you do not timely file Form 8843, you cannot exclude the days you were present in the United States as a student.

Penalty for Not FilingForm 8843(this is from instruction section on form 8843)
If you do not file Form 8843 on time, you may not exclude the days you were present in the United States as a professional athlete or because of a medical condition or medical problem that arose while you were in the United States. Failure to exclude days of presence in the United States could result in your being considered a U.S. resident under the substantial presence test.

The red words above says exempt individual still need to file form 8843 even if then don't need file tax return. My question is that, since these people don't need to file tax return, they don't have any deductable tax, how can the penalty affect these people if they do not file form 8843 in time?

MukatA · Apr 15, 2008, 02:06 AM

1. For students from India, the tax treaty allows them to claim exemption of the spouse if he/she did not have any income.

2. Nonresidents with exempt status must file Form 8843 alone if no tax return is required. Read instructions to form 8843.

jjlex · Apr 15, 2008, 09:53 AM

Originally Posted by MukatA

1. For students from India, the tax treaty allows them to claim exemption of the spouse if he/she did not have any income.

2. Nonresidents with exempt status must file Form 8843 alone if no tax return is required. Read instructions to form 8843.

Yes, I understand this. What I don't understand is the logic of these 2 rules. For the first one, is there any advantage for students from India to claim exemption of spouse if their spouse did not have any income? For the second one, it looks like the penalty doesn't have "practical effect" on people who don't follow this rule if they don't need to file tax return.

Thanks for your helps!