Hi,

I am on H1 and my wife just joined me on H4 in Dec 2007, do I need to file returns jointly or separately. Taxes withheld for NJ and I moved to TN. How should I file taxes and get refunds for state taxes. Please guide.

Chetan

You can file jointly with your wife and you both CHOSE to be treated as resident aliens. This will allow you to claim the $10,700 joint standard deduction plus two $3,400 personal exemption (for yourself and your wife).

The downside is that you must declare ALL 2007 world-wide income. There are two offsets available, by either claiming a Foreign Tax Credit (Form 1116) or a Foreign Income Exclusion (Form 2555).

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