Safe harbor rules for dual status?


P

P.S

I am single.
Changed status from F1 to H1 on Oct.

Question 1
Can I file tax return as non-resident for whole 2006? and
how to file since I pay FICA and medicare during H1

Question 2
If I married by 4/15/2007, can I file my tax return as
resident jointly for 2006 using first year choice?

Question 3
Since I paid far more tax than last year so far, can I set
the number of exemptions for tax withholding to be quite
large without penalty? Is Safe Harbor rules applicable for
dual status? how to mention to use safe harbor in 1040 form?

Thanks
 
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B

BillPatch

P.S said:
I am single.
Changed status from F1 to H1 on Oct.

Question 1
Can I file tax return as non-resident for whole 2006? and
how to file since I pay FICA and medicare during H1
Yes, file Form 1040NR. For income tax purposes you are
a non-resident alien for the entire year. (I am making the
assumption that your previous time in the U.S. was as a
student or trainee under the F1 visa.)
Question 2
If I married by 4/15/2007, can I file my tax return as
resident jointly for 2006 using first year choice?
No, single versus married status is determined as of the
end of December 31, 2006.
Question 3
Since I paid far more tax than last year so far, can I set
the number of exemptions for tax withholding to be quite
large without penalty? Is Safe Harbor rules applicable for
dual status? how to mention to use safe harbor in 1040 form?
You will not have dual status for IRS purposes. As I
mentioned above, they consider you a tax NR alien. As
such your tax withholding must be set at the same level
as required before: single, 0 withholding allowances, and
an extra phantom amount of income assumed per pay
period. A NR alien is not supposed to be allowed to reduce
withholding from this formula.

Safe harbor rules are used to determine required estimated
tax, and none is requred if your withholdings are figured
correctly.
 
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