Hi,

I am in US on L1 along with my wife (L2) since Aug 29, 2006. I am getting US salary here since that time. Before coming to US I was getting indian salary for which I have paid taxes in India. In my W2, only US salary is mentioned. My wife is not earming any income in US.

1. Do I file as a non-resident-alien (married filing jointly) or as a resident alien (married filing jointly)?
2. Do I need to include my Indian salary while filing tax return in US?
3. Which form should I use to file my US tax returns?

Thanks very much for your help.

-Amit

taxsearcher

Amit,

At this point you should file as a NR. Use a 1040NR and do not include any income that you earned before coming to the US.

IF you want to wait until you pass the SPT this year (2007), you and your wife can elect to be residents for the full 2006 year but you must include the income from India as well and then claim a foreign tax credit. In that case you would file a 1040.

grover_amit

Thank you very much for your response.

I have few further queries related to this.

1. Can I file under non-resident-alien jointly with my wife or do I need to file single?

Thanks.

sagarax

Hi Experts,
I'm also in similar situation as Amit with slight difference.

I am in Arkansas state US on H1B along with my wife (H4) since Aug 13, 2006. I am getting US salary here since that time. Before coming to US I was getting indian salary for which I have paid taxes in India. In my W2, only US salary is mentioned. My wife is not earming any income in US/India. I was in US on business visit (B1) before from Oct 2004 till Jan 10 2005.

I have prepared return forms by consulting with one of the reputed Tax Professionals. But I still have doubts whether I'm doing the right thing.

1. Do I file as a non-resident-alien (married filing jointly) or as a resident alien (married filing jointly)? -- I have filled 1040EZ form. Is that correct? From previous post I assume that if I extend my filing dates, I can become resident alien. But Still I'm not clear about the difference.
2. Do I need to include my Indian salary while filing tax returns in US? -- I have not included as I have paid taxes in India and will be filing for returns there also.
3. Which form should I use to file my US tax returns? -- what are the advantages/disadvantages of filing returns as resident/non resident alien?
4. What are the consequences of filing wrong form?

I want to re prepare my return forms if required. Can I ask for a reimbursement of the money from the tax consulatnt who helped me?

Thanks very much for your help.

-Sagar

AtlantaTaxExpert

Grover:

You CANNOT file Form 1040NR or 1040NR-EZ jointly. You must file as a Married Individual separately.

Sagar:

1) If you file as a non-resident alien, you CANNOT file jointly, nor can you claim you wife as a dependent. If you file jointly, you get to claim your wife's personal exemption PLUS get a double standard deduction of $10,300.

2) If you file jointly, you MUST include the Indian income. You should file Form 1116 to claim the Foreign Tax Credit on the Indian taxes you paid, but the credit will NOT be dollar-for-dollar.

3) The only way to know which way is best (filing jointly or as a non-resident alien or filing as a dual-status alien) is to do it all three ways and compare the results.

4) Consequences is you may pay too much in tax.

You can ask for a reimbursement, but if he already put some time and effort into preparing the return, he will likely refuse to refund the fee.