How to fix wrong filing ?

[muzunda]

Hello the Tax Experts,

My problem is wrong filing in the past three years and how to fix this issue before it becomes noticeable.

I came to the US in 2001, and from 2005 thru 2007, I have been filing taxes. In 2005, it was filed as an International student, meaning non-resident, through the accountants at school.

Unfortunately, 2006 and 2007 were filed as resident by one of professional accountant – I asked him specifically and made it clear to him that I was on F-1 student visa and his response was that this is how he files for all students. In addition, I have been exempt from Social Security and Medicare for all the paychecks I received so far.

Now, I am on H-1B visa status and I will need to file taxes at year end. Could you please advise me on with the following questions:

1) My H-1B visa is effective as of October 1, 2008. Year end do I file as a resident or non-resident?
2) In 2008, from January thru October I didn’t pay any Social Security nor Medicare. Would this become an issue when file my taxes? If so is there an alternative how to fix it?
3) Lastly, what should I do for 2006 and 2007 tax filing? As I understood, they were filed wrong.

Please advice at your earliest convenience. Thank you for your assistance again.

[Atlanta Tax Guru]

Based on the information provided, you filed correctly for 2005, 2006 and 2007.

Tax Year 2005 was your last year as a non-resident alien. The exempt status afforded to F-1 students applies for ONLY FIVE CALENDAR YEARS. For you, that would be 2001 through 2005. Your exempt status expired on 31 December 2005, and you became subject to the Substantial Presence Test on 1 January 2006.

Hence, filing as a resident alien for 2006 and 2007 WAS correct.

1) You should file as a resident alien.

2) Now that you know the facts, you have the legal obligation to notify your employer (preferably in writing; email is good for this purpose) of your revised resident alien status and that you were in fact liable for Social Security and Medicare taxes for ALL of 2008. Once that notification is done, you have met your legal responsibilities. It is then up to the EMPLOYER to correct the situation and collect any back taxes for Social Security and Medicare.

3) Do nothing; the return filed were the correct returns.

[muzunda]

Thank you so much for the quick response. I will contact the employers and seek their assistance to correct this problem.

thank you for your time again....

[Atlanta Tax Guru]

Glad to help!