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Complicated tax situation (claiming dependants and ITIN related)
Hi.
I came to the United States in September 2004, on a R-1 (religious worker) visa. My wife is also here, on a R-2 visa, and as per her visa requirements, she doesn't have any US income source. I have a SSN, but my wife doesn't and she is not allowed to have one either (I guess she could apply for an ITIN, but I'm not sure it's necessary).
Last year, I did the taxes by myself, and filled a 1040-EZ form, and I was able to claim her as a dependant. I got my refund back, both from the Federal return and from the State (NY) return.
This past August (2005), I had a daughter born to us. She is a US citizen and has a SSN.
My questions are:
What forms should I file this year, both for my Federal return and for my NY State return? (our only income is still mine)
How can I claim my wife and my daughter as dependents, considering that my wife does not have a SSN? What do I write as her SSN on the forms?
If my wife needs to apply for an ITIN (which I've been told as a separate application mailed TOGETHER with your return), what do I write on my return(s) in the box for her SSN/ITIN (she will get the ITIN eventually, but at the time of the mailing of my return I will not have it, obviously)? Could I write "NRA" (non resident alien), although in 2005 we've been in the States all year long? Is there another phrase, such as "Applied for a ITIN" so something similar to write (I know for a fact that leaving the box empty is not allowed)?
Are there any special deductions or credits I can claim for my wife or child?
I am confused and am surprised the IRS processed the 1040-EZ last year because. if you claimed your wife as a dependent, there is nowhere on the Form 1040-EZ to claim dependents. With Form 1040-EZ, you can only file jointly with your spouse, which would be impossible if she had neither the SSN nor the ITIN. Could you re-check your facts/posting?
As for the rest, I cannot answer until you clarify your post.
Further, you need to look at your situation and determine whether to change your visa status. Since your daughter is a U.S. citizen, you can probably apply for a green card to become a resident alien.
Finally, your country of origin would be helpful information.
Indeed, it's my mistake. Last year we didn't have a "substantial presence in the US" (as we arrived at the end of September), so I filed on my own 1040NR-EZ, without claiming my wife as a dependent.
I would like to do this and to also add my daughter as a dependent, this year.
I am not intending to remain in the United States. I will return to Romania (where I come from) in the summer or 2007, so applying for a green card is not an option for me.
Since you now meet the Substantial Presence Test, you should file as a resident alien and file Form 1040 or 1040A. You cannot your wife as a dependent filing these forms, but rather should file jointly with her in order to claim her personal exemption and increase your standard deduction to $10,000. However, in order to be to file jointly with you, she must have an ITIN. You should apply for one using a W-7, and attach it to the tax return you mail in. Leave her SSN block BLANK; the IRS personnel will fill it in when they assign her the ITIN, then process your return.
Since your daughter has a SSN, claiming her as a dependent should not be a problem. You will probably qualify for the Child Credit ($1,000) if you owe any taxes. Depending on your wage level, you may also qualify for the Earned Income Credit.
For NY, you will file as a full-time resident of NY (Form IT-201, I believe).
Again, thank you for the reply. It was realy useful.
One last question, though... I see that on form IT-201 the standard deductions vary according to the filing status: $7,500 for "Single" and $14,600 for "Married filling joint return". In order to get the $14,600, I guess I would have to file the Federal return and wait for the ITIN first (they say 6-8 weeks) and then use this ITIN for my wife on the State IT-201 return. Is that correct or is there another way to file the State and get the bigger deduction?
I started preparing my return using 1040A and I have the following problem: besides the wages that are reported on a W-2, I have a stipend that I got and I must report, and I can't seem to find any place on the form to report it.
I looked at the instructions for 1040A, and this is what they say:
Scholarship and fellowship grants. Scholarship and fellowship grants not reported on Form W-2 must be included in the total on line 7. Also, enter “SCH” and the amount in the space to the left of line 7. However, if you were a degree candidate, include on line 7only the amounts you used for expenses other than tuition and course-related expenses. For example, amounts used for room, board, and travel must be reported on line 7.
The scholarship/stipend is taxable for sure (all of it). Honestly, I don't know how to include it in box 7 on the form, as I already have the income from wages (W-2) in that box.
Should I add the two ammounts and write the total in box 7? Should I write only the ammount of the stipend in another box? Also, where do I write "SCH" (I don't know where the "left of line 7" is)?
Print the acronym "SCH" between the "W-2" and the "7". When they say "in the space to the left of line 7", they mean to the immediate left of the numeric 7.
Let's assume your W-2 wages and taxable scholarship stipend total equals $15,000. Once you are done, Line 7 would look like:
The IRS requires the "SCH" entry so they know that the total includes some taxable scholarship money that caused the Line 7 entry to exceed the total of the W-2s which are attached to the From 1040A. Without that "SCH" entry, the IRS computer would assume that you had made a simple arithmetic error and reject the return as inaccurate.
I checked and my daughter qualifies for the Child Tax Credit. Now, my questions are: What is this credit? If I claim it now, will I have to give the money back at some point the future, or is it non-refundable? Will I have to report it in my next year's return (if yes, how)?
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