[openloop]

Hello Tax experts,

I need advice on my tax status. Please help.

Background:
I moved to US and started working from 5th July, 2011. I am on L1 visa and I am married. My wife is on L2 and is attending college.

Now, for tax purposes I am not a resident alien since I do not meet substantial presence test. It requires 183 days of presence, but I have 180.

First Year Choice:
I want to choose first year choice. I went through the IRS website: (http://www.irs.gov/publications/p519/ch01.html#en_US_publink1000222164).

After electing first year choice, I will be dual-status alien (non-resident till 4th July and resident from 5th July). IRS also says that a dual-status alien can choose to be resident if certain requirements are met ("You are married to a U.S. Citizen or resident alien at the end of the year" - And, my wife will be resident alien because of first year choice)

1-QUESTION: Is my interpretation correct? Can I file as a resident alien for FULL YEAR?

Filing:
Since I will be a resident alien for full year, I need to report my worldwide income.
2-QUESTION: Since I already paid taxes in my home country, can I claim an exemption? What forms do I need?

I paid tuition fees for my wife?
3-QUESTION: Am I eligible for education credits? Do they apply to first-year choice case?
Thanks!

[AtlantaTaxExpert]

1) Yes, you can file jointly.

2) Yes, you must declare all world-wide income and claim the Foreign Tax Credit using Form 1116.

3) Yes, you can claim the education credits.

If you need my professional help, please look up my email address in my profile.

[openloop]

AtlantaTaxExpert,

Thanks for your expert advice. I get a better understanding now.

[AtlantaTaxExpert]

Glad to help!

[f1student123]

From pub 519:
"Choosing Resident Alien Status

If you are a dual-status alien, you can choose to be treated as a U.S. resident for the entire year if all of the following apply.

You were a nonresident alien at the beginning of the year.
You are a resident alien or U.S. citizen at the end of the year.
You are married to a U.S. citizen or resident alien at the end of the year.
Your spouse joins you in making the choice.

This includes situations in which both you and your spouse were nonresident aliens at the beginning of the tax year and both of you are resident aliens at the end of the tax year"

If I and my wife both are dual status aliens for both 2011 and want to choose "Resident Alien Status" for entire year, do we have to file file as "Married filing Jointly" or can we file as separately...

From the above text in 519, I understand that in order to get Resident Alien status, we both must make that choice ( "Your spouse joins you in making the choice"... ) But it does not say that we have to file jointly...

Though we are dual-status, we would prefer to file as Resident Alien... because we don't have much foreign income and it is simpler

[AtlantaTaxExpert]

Yes, you MUST file jointly. It may not be explicitly stated, but it IS a requirement.

[f1student123]

Thank You!

[AtlantaTaxExpert]

Glad to help!