H1B - Dual Status Filing - Spouse and Dependents

AtlantaTaxExpert · Jul 9, 2012, 12:35 PM

Karthik:

You can file jointly with your wife and you both CHOOSE to be treated as resident aliens. This will allow you to claim the $11,800 joint standard deduction plus two $3,800 personal exemptions (for yourself and your wife), plus an third personal exempt for your child. You can also get the $1,000 Child Tax Credit

To apply for an ITIN, you need to complete Form W-7 for your wife and. You need to make a photocopy of her passport, then get the photocopy CERTIFIED by the Indian government as a TRUE COPY of the passport. Notarized photocopies are NO LONGER ACCEPTED as adequate proof by the IRS.

This can also be done at a Indian notary, but if she will be coming to the U.S. The downside is that:
• You must wait until 1 June 2013 to meet the Substantial Presence Test before you can file for Tax Year 2012.

• You must declare ALL 2012 world-wide income (wife’s home country income, if applicable). There is an offset available by either claiming the Foreign Tax Credit (Form 1116).

Even with the downside, this is probably the best way for you to file.

If you need professional help filing the return and submitting the Form W-7, OI prepare these types of returns routinely. You can find my email address in my profile if you do not see it below.

karthikrekha · Jul 9, 2012, 01:17 PM

Thanks so much AtlantaTaxExpert. I have a few more clarification questions.

1. If "we both CHOOSE to be treated as resident aliens", then are we considered residents for the entire year? I ask because, till Sept 31 2012, I am on F1 OPT and my wife will not even be in the US. Will I be a non-resident alien and file non-resident taxes till Sept 31st? If not, I may lose the FICA benefit that I have as a F1 - OPT visa holder.

2. If we fill Form 1116, then we need not pay tax my wife's outside US income? Can you confirm?

Can you point me to some details as to your charges and stuff?

Thank you again.

regards,
Karthik Iyer

AtlantaTaxExpert · Jul 9, 2012, 01:48 PM

Karthik:

1) Yes, you ARE considered to be residents for the entire year. Your wife's physical locatuion is irrelevent; she could be on Mars for all the IRS cares. You will NOT lose the FICA exemption retroactively for the first nine months of the year.

2) You get a credit for the income taxes paid to your home country. It MAY be a dollar-for-dollar credit, depending on your level of income.

I CANNOT quote fees on this forum. You need to email me for that information.

karthikrekha · Jul 9, 2012, 07:53 PM

Thank you so much. I will contact you soon.

What is the latest date that my wife can enter the USA if I want to do what you suggested?

AtlantaTaxExpert · Jul 12, 2012, 12:17 PM

Theoretically, your wife and child can enter on 31 December 2012 and you would still qualify for the Child Tax Credit.

However, the sooner the child gets to the U.S., the less likely it would be for the IRS to challenge the deduction.

H1B - Dual Status Filing - Spouse and Dependents

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