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I am a non-resident alien for the year 2017 as far as tax returns are concerned. I used a software to complete my 1040NR form, but I have a question regarding the document that was prepared by the software. I am a citizen of India, therefore I can claim a standard deduction of $6350 as per the US India Tax Treaty Article 21. In the form that was prepared, this value appeared on page 3 line 1 (State and local income taxes) under Schedule A - Itemized Deductions (Taxes you paid) with "US-India Income Tax Treaty, Article 21" on the dotted line. Is this the correct place to mention this standard deduction? Please help.

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You calculate the standard deduction with Worksheet 5-1 in Publication 519. At the end of the worksheet, the result is entered into Line 38 of 1040NR (the "Itemized deductions" line) or Line 11 of 1040NR-EZ (the "Itemized deductions" line), and you put "Standard Deduction Allowed Under U.S.–India Income Tax Treaty" in the space to the left of the line.

If you use 1040NR, you do not need to fill out Schedule A, whose result normally goes into Line 38, because the standard deduction replaces all itemized deductions. The standard deduction doesn't just replace state and local income taxes, so it doesn't make sense to put it there. (If nothing else was entered on Schedule A, the result would be the same, though the schedule unneeded; if something else was entered on Schedule A, then you would have taken too many deductions, as you cannot take the standard deduction and some itemized deductions at the same time.)

  • Yes, that makes sense. So where should the standard deduction be mentioned? Line 38 states 'Itemized deductions from page 3, Schedule A, line 15'. Does that mean it should be mentioned somewhere on page 3 or just on line 38? – ayerhs7 Mar 29 '18 at 18:02
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    @ayerhs7: I think you write it on the dotted line in line 38 – user102008 Mar 29 '18 at 19:47

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