New client from China

[Kea]

A new client was referred to me today (I love getting new ones this time of year!). She's been here on an F-1 visa for 2 1/2 years. Since she meets the 183 day presence in the US for 2009, I was going to use a 1040. If it had required a 1040 NR, I would have turned her down because I've never done one. She faxed me her forms including a 1040-S. I've never seen one before & didn't see it in ATX's list. I searched this board, and the examples that came up don't seem to match my case. But I'm not even sure where to begin with it.

She attached her attempts at this return. She used Cintax (Complete International Tax Preparation) & TurboTax. She attached a printout on a 1040NR from Cintax. For TurboTax, she attached a summary page -- I assume it was a 1040.

Some of what I've read says that there should be no SS or Medicare withholding. The 1042-S appears to have no withholding at all ($5000 gross income, code 19 & exemption code 04). Her W-2 from the University where she teaches & is a grad student, has federal withholding, but no SS or Medicare. But her W-2 from ExxonMobil withholds from all 3. Not sure which is correct.

Should this go on a 1040NR or standard 1040?

If a standard 1040, how is the 1042-S handled (the IRS instructions I found were about how to issue them)?

Any suggestions welcome.

Thanks

[Lion EA]

The 1042-S is essentially a W-2 from a US company to a non-US individual for compensation. I don't prepare returns for many foreigners, so I'll wait for someone more experience to jump in with other answers for you. In the meantime, read IRS Pubs 678-FS, 4011, and 4704-FS,

[Kea]

I saw some of that info about it being for non-US. But if she met the 183 day test, does that override? When she said she had been here 2 1/2 years, I figured I wouldn't have to file an NR. But I wasn't expecting the 1042-S. Looking at the 1040NR she attached, it seemed to have a place for the 1042-S. Maybe it should go there?

I'll look over those pubs tomorrow.

Thanks!

[Lion EA]

I forget which visa is which, but if she's on a student visa, she has no qualifying days in the US. Maybe for a trainee visa, too. Just treat the 1042-S like a W-2. I had a US citizen who lived overseas for awhile who accidentally received Forms 1043-S (I think) for interest earned. It took him a couple of years to get it changed, so I just reported the interest as usual in the meantime.

[Kea]

Per Wikipedia (I know it's not a real source, but it's fast), the F-1 Visa is a student visa. So, I guess it does need to go on a 1040NR.

I'll e-mail her & decline the job. I also don't want to try to figure out how to get her SS & Medicare refunded from Exxon.

Thanks so much!