I am on H1-B visa, for about 5 years now. My wife is from India. She got H4 visa and entered USA on June 22. Until May 2012, she was working with a Software company in India.

As I am preparing 2012 taxes, I have a few questions, that I am hoping you could help:
1. After looking through 1040 instruction, she passes substantial presence test, since she has been in the US for more than 183 days.So I am planning to file married - jointly, by including a declaration.

Now to report her India income, should I include it in line 7 of 1040?
Her india income does not have w2 form as you know. So if I include her income in line 7, should I include any additional form instead of w2 to confirm her income?

2. Her Income during her days in Software company in India was already taxed. I am not sure whether we should report that income for US tax purposes. When I checked online looks like I have to file 2555 or 1116 in the tax return. Is the choice to choose between the two with us given my case or is there any rule governing which one to choose? I read both instructions and I am a bit confused.


Regards,
Kumar

You DO include her income on Line #7 of Form 1040.

You CANNOT file Form 2555, because she would NOT be a resident for the entuire exclusion period. You MUST file Form 1116.

If you believe that you will need professional help filing this year, this IS what I do. Please double-click on my name (Atlanta Tax Expert) above to access my profile. You will find my email address in the signature portion of the profile (scroll down to the BOTTOM of the page).

Thanks for the clarification!

Glad to help!