Following are the details of our status during 2009 tax filing
Me - H1 (Pennsylvania) - Had Income
Wife - H4 (Pennsylvania) - No Income
Filing Status - Married Filing Joint
Claimed my wife as dependent in my tax return.

In 2010,
Me - H1 (Pennsylvania) - Had Income
Wife - F1 (Delaware) - Had Income

Questions I have

1. Which filing status would be beneficial, Married Filing Joint (MFJ) or Separately (MFS)?
2. Since she was on H4 during 2009 and now on F1, can her status change from Resident Alien to Non Resident Alien for tax purpose? If it can be changed, can we still use MFJ, since I am a Resident Alien?
3. I paid her tuition for one of the semesters; to use the tuition fee in itemized deductions should I use MFJ as the filing status or is there any other option?
4. If filing as MFJ, can she be claimed as dependent even though she is on F1 status now?
5. Should we include our income in each others for state tax filings?

Any help/advice on our scenario would help in filing our tax returns correctly.

Thanks

1) More than likely, filing jointly is the best course of action, tax-wise.

2) You can still file jointly with your spouse, even though she in under a F-1 visa.

3) You do NOT deduct the tuition as an itemized deduction; it is deducted on Page 1 of Form 1040 as an adjustment to income, or claimed as a tax credit.

4) If you file jointly, she is NOT your dependent; she is your co-filer; you are two persons filing ONE return.

5) You report the joint income on both state returns, but you pay taxes ONLY on the income earned in each respective state. It probably has no effect on the Pennsylvania return, but you may poay a somewhat higher tax rate in Delaware.

If you need professional help filing your return, email me at [email protected].