Hello All

I am studying in US since 2001, currently I am working with a company on my OPT, My H-1 is applied and will not go into effect till may 1, 2006.
I recently got married.

I have following questions regarding Taxes I will be filing in 2006

1. Which Form should I file, Should I use 1040 NR
2. My wife is not working, I heard there is a deduction which I can claim for her.
3. Can I claim India Treaty Benefits since I am still on F-1
4. Can I take Standard Deduction which I believe is about 4000$

I would really appreciate any input on these questions.

Many Thanks

Nitin

AtlantaTaxExpert

Nitin:

Since you cited the Indian Tax Treaty, I assume you are an Indian national.

Since you are are still on F-1 visa status, you should file Form 1040NR. The time spent in the U.S. while under a F-1 visa does not count towards the Substantial Presence Test. You can refer to IRS Pub 519 (which can be downloaded from www.irs.gov) for details.

Since you are an Indian citizen, you can both claim your wife as a dependent and claim the standard deduction, which I believe is $5,000 for 2005.

However, to claim your wife as a dependent, she will need a Individual Tax Identification Number (ITIN). This is done with the W-9 form, which can also be download from www.irs.gov. Read the instructions that comes with the form carefully. If it is too confusing, get professiolnal help, both with the W-9 and filing the tax return.

nitinsingla

Dear Sir( Atlanta Tax Expert)

Many thanks for your time and response. I am very sorry but a follow up question:

Like you said "Since you are an Indian citizen, you can both claim your wife as a dependent and claim the standard deduction, which I believe is $5,000 for 2005"

Do you 5000$ for each deduction or just one deduction of 5000

On the form 1040 NR, Page 1, Filing Status and exemptions for Indivisual, I have read somewhere that Column 7c I can claim my wife as dependent , I.E the total exemptions I will be claiming will be 2, one for married and one for dependent wife( Each worth 3200$)


2. Also you said " to claim your wife as a dependent, she will need a Individual Tax Identification Number (ITIN)". My wife recently got a Job with a company,who she use to work while she was in India, she received her L-1 and her start date is Jan1, 2006, she has already received her SSN, but in 2005 she was entirely dependent on me,

So can I still claim her as dependent, Sorry for missing this earlier

Thanks

Nitin Singla

AtlantaTaxExpert

Nitin:

The $5,000 deduction is the standard deduction for a Single person. You cannot file Married Filing Jointly or Head of Household when you file Form 1040NR.

The $3,200 exemption is the personal exemption, which you will get one for yourself and one for your wife for a total of $6,400.

You can claim your wife as a dependent on Line 7c as you stated below. If she has no U.S.-based income in 2005, there should be no problem. Use the SSN your wife has been issued when you file your Form 1040NR. If she does have 2005 income from a U.S. source, then she she will need to file her own Form 1040NR.