Hi,

I arrived in USA on 1st september 2008 and have continously been here since then.Since I have passed the substantial presence test on May23 2009,I am intending to take first choice as resident alien for the part of year Sep-Dec 2008.Now when I file my tax return for 2008 should I file a dual Status return or can I file a return showing my income for only the period for which I have made the choice as resident alien.If I need to file a dual status return,how to include the income which I earned in India from Jan-August 2008.

Thanks in advance

Trisha

MukatA

What visa do you have?
Also if you are not married, or not filing joint return, it is better to file nonresident tax return Form 1040NR or 1040NR-EZ. You will report only you U.S. income.
There is no advantage in filing Dual status tax return.

AtlantaTaxExpert

Trisha:

Assuming you are single, you will file a dual-status return now that you have met the Substantial Presence Test.

As for the India-sourced income from Jan - Aug 08, you do NOT report that income. The only income reported on the dual-status return is U.S.-sourced income.

trisha822003

Thanks.I am on L1 Visa,Married & filing single return.So is it advisable for me to file dual status return ?

AtlantaTaxExpert

Actually, no. You should file as a non-resident alien, because you had NOT met the Substantial Presence Test for 2008 on 31 Dec 2008.

You CAN file as a dual-status alien, but there is no advantage tax-wise for filing a much more complex return than simply as a non-resident (filing Form 1040NR or 1040NR-EZ).

trisha822003

Can't I take first choice as resident alien for the period Sep-Dec 2008 as Iam Still in USA.I donot wish to file a joint return with my husband as we have to include our worldwide income then and it is not advantageous for us (His Income exceeds any benefits that we get from standard deduction & personal exemption).Hence I wish to file single dual status return as I was in USA for 4 months only & will get refund of almost the entire tax I paid If I include standard deduction,personal exemption & also be eligible for Economic stimulus credit(recovery rebate credit).I will be grateful for your advice .

One more question,I will be staying in US till August end & then returning back to India.So can I file as dual status for the year 2009 & also get economic stimulus credit if I donot get the credit this year.Thank you.

AtlantaTaxExpert

Trisha:

You CANNOT file as a resident alien under First Year Choice unless you file jointly with your husband, with you both choosing to be treated as resident aliens for the entire AND counting your wolrd-wide income.

If you file by yourself, then you MUST either file as a non-resident alien or as dual-status alien. In either case, you CANNOT claim the standard deduction and you are NOT eligible for the Recovery Rebate Credit, though you can claim your own personal exemption of $3,500.

For 2009, you MUST file as a dual-status alien, and, again, you will NOT be eligible for any Economic Stimulus Credit nor will you be able to claim the standard deduction.