Dear friends,
I just got a MFJ client that has $205,000 AGI.
The wife was an international student who goes to graduate school (graduated this year) and worked for a company while a student, then accepted a position in the company and continued receiving wages. Since the student WAS an international student and was exempt from social security and medicare taxes, the school did not withold anything except for federal WH.
I think the school is wrong, and should have taxed the client when her "exempt" status ended which is when she graduated, and accepted the position. The w2 only show amounts in box 1 and 2. All the proper state and local taxes were paid.
What would be the best way to pursue this issue?
She also paid around $10K for graduate school (portion out of her pocket after scholarship paid for the rest), and 200 something for student loan interest.
As far as I know HOPE and Lifetime phases out @ $114K and the student loan interest phases out @ $140K. Someone made a presentation @ the school telling the students that "Now that the GRADUATE SCHOOL is qualified, they would be able to deduct their expenses, and it would not be subject to phase out"
My questions are:
1- What to do about the Social security and Medicare taxes that remain unpaid
2- Is there something I am missing regarding a "NEW LAW" about the Graduate students and phase out? I tried to do some research but came out blank.
I know this is a very busy season for all of us, but any help is greatly appreciated.
Best regards,
Oz
I just got a MFJ client that has $205,000 AGI.
The wife was an international student who goes to graduate school (graduated this year) and worked for a company while a student, then accepted a position in the company and continued receiving wages. Since the student WAS an international student and was exempt from social security and medicare taxes, the school did not withold anything except for federal WH.
I think the school is wrong, and should have taxed the client when her "exempt" status ended which is when she graduated, and accepted the position. The w2 only show amounts in box 1 and 2. All the proper state and local taxes were paid.
What would be the best way to pursue this issue?
She also paid around $10K for graduate school (portion out of her pocket after scholarship paid for the rest), and 200 something for student loan interest.
As far as I know HOPE and Lifetime phases out @ $114K and the student loan interest phases out @ $140K. Someone made a presentation @ the school telling the students that "Now that the GRADUATE SCHOOL is qualified, they would be able to deduct their expenses, and it would not be subject to phase out"
My questions are:
1- What to do about the Social security and Medicare taxes that remain unpaid
2- Is there something I am missing regarding a "NEW LAW" about the Graduate students and phase out? I tried to do some research but came out blank.
I know this is a very busy season for all of us, but any help is greatly appreciated.
Best regards,
Oz
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