[praskme]

Hi,

I was in Seattle, WA from Mar 2006 to Nov 2006 on H1B. My Wife was with me from Apr 2006 to Nov 2006 on H4. I had mentioned M2 as the FWT. I am back to my native country from Nov 2006. I have the following queries regarding filing the tax. Kindly clarify my queries.

1. Am I a resident alien or Non resident alien (I am confused with 183 days logic, as I was in US for more than 183 days last year)?

2. Based on the above answer please let me know which forms do I need to fill?

3. Is W7 the only form which I will fill for my wife?

4. In the W7 form, which option shall I select from these two:
a. Dependent of U.S. citizen/resident alien
b. Dependent/spouse of a nonresident alien holding a U.S. visa

5. What are the documents that need to be submitted for W7?

6. Do I need to file the tax as "married filing jointly" or "married filing separately"?

7. My company has given the W2 form. Is it the only form which will be given by company?

Looking forward for immediate response.
Thanks In Advance

[taxsearcher]

It looks like you would be a dual status alien. This is a little more complex than the basic situation. Alternatively you might be able to file an election to file jointly as residents for the full year (but you would need to include your worldwide income and then claim a foreign tax credit for any foreign taxes paid).

It's not a straightforward case.

[AtlantaTaxExpert]

TaxSearcher:

Does he not have to be in the U.S. at the end of the year to use the "file jointly as resident for the full year" options?

[taxsearcher]

They need to be resident at year end. Technically, once you meet the SPT, you are considered resident until Dec 31. I'd have to double check it, but I think you have to actually file an election to be considered "not resident" for that last month anyway, and hence they should be able to get around this by simply not filing the election.

[praskme]

Thanks for your quick response taxsearcher and ATE.
Earlier my understanding was either I will be NRA or RA, but now with this Dual Status I am really confused about the forms to be filled. So what forms should I file now?
Do I need to claim for Closer Connection Exception?

[taxsearcher]

The problem is that you are resident for part of the year and non-resident for the other part and hence you really should file as a dual status alien (part year as each). You can see Publication 519 to see how to do the forms; unfortunately it is not easy.

I think you might be able to make a case for electing to file as a resident for the full year but it is a little more gray (as to whether you should) and it will introduce other issues for you such as needed to include your foreign income for US tax (and then claim a foreign tax credit).

Either way, your taxes are not going to be a straightforward situation because of your situation. I hope you didn't live in a state with a state tax to add to your frustrations.

[AtlantaTaxExpert]

TaxSearcher:

I hope your 2 Mar post is accurate, as I have a client in a similar situation. I emailed you separately on it.