Hi There,

I was on F1 visa until 30th Sept 2010. Then my status changed to H1 from 1st Oct 2010. I also got married in May 2010 and my wife is in USA since Nov 2010.

I was not paying SSN and Medicare taxes until Oct 2010 (under F1 status). Given these facts, which form should I use to file income taxes?

I read about "First-Year Choice", but not sure about its constraints. Can I use it? Is it beneficial?


Thanks,
Yogesh

You have two choices.
Choice 1: You did not complete SPT in 2010, you can file non-resident tax return.

Choice 2: You can file resident tax return as Married Filing Jointly.
You must wait to file your tax return till you meet the Substantial Presence Test in 2011. Your U.S. Tax Return: Substantial Presence Test (http://taxipay.blogspot.com/2008/04/substantial-presence-test.html)

You will get standard deduction of $11,400 and exemptions ($3,650 each) for both of you. You must both declare your worldwide income for 2010. If you have any foreign income, and on that income you paid taxes in the foreign country, then you can claim foreign tax credit (Form 1116) or you can use Foreign Earned Income Exclusion (Form 2555). Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income (http://taxipay.blogspot.com/2008/03/us-citizen-or-resident-with-foreign.html)

You will complete forms W7 (application for ITIN) for your spouse and attach with your tax return.
You can also deduct moving expenses. Use form 3903.
If you decide to file as Married Filing Jointly as First Year Choice, you must attach a statement signed by both of you to your return stating that you qualify to file as residents as First Year Choice and that you CHOOSE to file this way.

I guess, it will be beneficial to go with choice 2. But can I file the tax return now or I have to wait until some time in 2011?

Thanks for such a detailed answer MukatA.