Hello,
I am currently on H1b visa. My wife and daughter are on H4 visa. I do not know how many allowances I can claim at the maximum on W4 form so that less taxes can be withheld. Could you please help me?

Shurav

Shurav:

As a foreign national on a work visa, the IRS specifies that you can claim MARRIED with, at most, TWO allowances.

This is done to ensure that sufficient taxes are withheld from your salary to cover your income tax liability.

Now, your employer MAY or MAY NOT be aware of this restriction. If not, claim MARRIED with THREE allowances.

Hello Atlanta Tax Expert,
Thank a lot for your response. My wife and daughter got H4 visa recently. I think they are non-resident alien even for tax purpose. What should I check on number 3 of W4 form: Single or Married? If I choose single, can I still claim 3 allowances?
I request for your help.

Shurav

Check MARRIED and claim THREE allowances.

If your employer accepts it, enough money will be withheld from your salary to cover your tax liabilities without over-withholidng TOO much.

You can file jointly with your wife and you both CHOOSE to be treated as resident aliens. This will allow you to claim the $11,700 joint standard deduction plus two $3,800 personal exemption (for yourself and your wife), plus an additional $3,800 personal exemption for your child, PLUS the $1,000 Child Tax Credit.

To apply for an ITIN, you need to complete Form W-7 for your wife and child. You need to make a photocopy of their passports, then get the photocopy notarized. This can be done at your local bank in most states in the U.S.


The downside is that you must declare ALL 2009 world-wide income (wife's home country income, if applicable). There is an offset available by either claiming the Foreign Tax Credit (Form 1116) or to claim the Foreign Earned Income Exclusion (Form 2555).

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

Hello Atlanta Tax Expert,
Thanks a lot again for your help. I have few more questions:
1. Can I apply for ITIN any time of the year?
2. She had some income in the year 2009 in my/her home country but she didn't have any income in 2010. Which form should I fill up ?

I look forward to hearing your suggestions.

Thanks
Shurav

You can choose to file joint return as residents and claim your daughter. You should file W-7 with your tax return.

The only exceptions to the rule of applying for an ITIN with your tax return is if you need the ITIN to:

- Open a bank account.

- Allow the child to attend school.

In both cases, you need a signed letter from the bank or the school stating the need for the ITIN.

Thank you very much. Your suggestions are very helpful. Could you please help me in these concerns too?

- I worked on CPT (Curricular Practical Training) from July 2008 to December 15, 2008, and from December 15,2008 to December 15 2009, I was working on OPT. When I filed tax return for 2008 and 2009, I filed as a SINGLE WITHOUT DEPENDENTS (both years) even if I am married and I have a daughter. I am not sure if I did right. If I did wrong, what can be done at this point? Currently, I am on H1B status from December 15, 2009.

I would really appreciate your suggestions.

Shurav

Shurav:

Assuming you are an Indian citizen, you filed incorrectly by either:

1) Filing as a resident (filing Form 1040/1040A/1040EZ) when, in fact, you are a non-resident alien whoh should file Form 1040NR.

2) Filing as a non-resident alien, but failing to claim your wife and daughter as dependents, something Indian students ARE allowed to do.

Further, I need to know what the effectve date of your H-1B visa was? Note that I said effective date, NOT the date the H-1B visa was stamped. If the effective date (as shown on your approval notice) was 1 October 2009, then you could have filed JOINTLY with your wife as resident aliens PLUS claim your child as a dependent.

Email me at [email protected] with the details so we can discuss this further.

I am a Nepali citizen. The effective date of H1B was December 15, 2009.
As you mentioned on the number 2, I filed the tax return for 2008 and 2009 as a non-resident alien but I didn't claim my wife and daughter as dependents since they were in Nepal. However, I knew recently that I could still claim them as dependents wherever they were.

Please let me know what I can do at this point.

Shurav

Shurav:

If Nepal is considered part of India, you CAN claim them as dependents by amending your 2008 and 2009 tax returns using Form 1040X. If not, then they cannot be claimed.

Email me at [email protected] for details on how we can amend your returns.

Hello Atlanta Tax Expert,
Nepal is an independent country. Is it only possible for Indian citizen because of special agreement between India and USA?
Do you mean International students ( On F1-OPT) CAN NOT generally claim for their spouse and dependents? Could you please clarify?

Shurav

Shurav:

The only foreign nationals who can claim family members as dependents are residents of Canada, Mexico, South Korea and India.

All other countries are NOT allowed to claim their spouse or children on their returns as non-resident aliens.

Atlanta Tax expert,
Is it the same even if I am on H1b status?Meaning, can't I claim tax return for my wife and daughter as my dependents, who are on H4 visa?
I would really appreciate your response.

Thanks,
Shurav

Shurav:

Sorry, but as a citizen of Nepal, you CANNOT claim your wife or child on your non-resident alien tax return, regardless of their location.

That may NOT be fair, but it IS the law.