Hi,

I have a question about my taxes for 2006. I have been on H-1B visa throughout 2006. I got married in July 06 in India and my wife is still in India and she works there. Can I file as status Married and claim her as a dependent? I know I'll have to file W-7 and stuff. But is it possible to claim the standard deduction of $10,300 by filing as married? Do I have to show her India income on the tax return? If yes, what documents do I need from India (assuming that tax return have not been filed in India yet).

Thanks a lot in advance.

Pr

AtlantaTaxExpert

Yes, you can claim her as a dependent if she is a non-resident alien (she is) and you file Married Filing Separately. You will need to apply for the ITIN. You will NOT get the double standard deduction of $10,300 this way, however.

You CAN also file jointly with her to get the $10,300 standard deduction, but you must claim her Indian-based income. You can also claim a credit for the income taxes she paid in India.

No documents are needed to prove her income for India on the initial filing. If the IRS asks, however, you need to have a method to prove her income.

raptor10

Thanks for the reply. So, I can claim her as a dependent even if she wasn't in the US? What status should I file the return as?

Single, Married Filing joint, Married filing separate?

I need to show that she earned income in India from Jan 01 - Dec 31? (convert the currency into dollars and fill that out?) What would be the best way to get maximum deductions in this case? Is it better to claim her as a dependent or file as married filing Joint?

I hope it won't have any negative implications in the immigration process when they ask for tax returns?

Sorry about asking too many questions.

Thank you.

AtlantaTaxExpert

How much did she make in India?

raptor10

She made around Rs. 3,80,000 (approx. $ 8636) in 2006.

(H & R Block said I can NOT put her on my return because she wasn't here in 2006 and must file as single ) She was in US in 2006 for 2 months on a business trip before we got married .

AtlantaTaxExpert

H&R Block is WRONG AGAIN (Big Surprise!).

The physical location of your wife is irrelevent if you file jointly. You will get a double standard deduction of $10,300 and $6,600 in personal exemptions. That, combined with the Foreign Tax Credit (Form 1116) will more than make up for the taxes owed on her India income.

ggupta1120

Now when you report your wife's income who has been working outside US, do you report the income from Jan1st to Dec 31st (the US tax yr) or the income earned during the Indian tax yr from April 1st to March 31st?

AtlantaTaxExpert

From 1 Jan to 31 Dec 2007.

ggupta1120

So just the pay stubs would do as the taxes are not filed yet?

AtlantaTaxExpert

Yes, the pay stubs are adequate proof.