Hello,

Your site is great! I hope you could provide answers to the following questions.

I came to study here in the US on Jan05 and finished my MS on Dec06 in my F-1 visa. Starting Jan06 I work as OPT. My employer sponsor my H-1B and will start Oct-01-2007.

1. What is my 2007 tax status - resident or nonresident?

2. I am not paying Social Security/Med as I am on OPT. Am I required to pay come Oct. 1?

3. I bought a house. Can I deduct real property tax and mortgage interests?

4. My wife is a non-resident and I have a chid who is a citizen. Can I add them as dependents?

Thank you very much!

Frankie

1) You have a choice: You can:

- file as a non-resident alien, probably filing Form 1040NR. You would be able to claim your wife and child as dependents and claim the Child Tax Credit for your child.

- file jointly with your wife and you both CHOOSE to be treated as resident aliens. This is the RECOMMENDED OPTION, because you will only be allowed to deduct the mortgage interest and real property tax if you file this way.

In either case, you will need to apply for an Individual Tax Identification Number (ITIN) for your wife using Form W-7 if she does not have a SSN or ITIN. I assume your child has a SSN.

2) Yes.

3) Yes, under the second option under #1.

4) Yes. Under either option under #1.

1) You have a choice: You can:

- file as a non-resident alien, probably filing Form 1040NR. You would be able to claim your wife and child as dependents and claim the Child Tax Credit for your child.

- file jointly with your wife and you both CHOOSE to be treated as resident aliens. This is the RECOMMENDED OPTION, because you will only be allowed to deduct the mortgage interest and real property tax if you file this way.

In either case, you will need to apply for an Individual Tax Identification Number (ITIN) for your wife using Form W-7 if she does not have a SSN or ITIN. I assume your child has a SSN.

2) Yes.

3) Yes, under the second option under #1.

4) Yes. under either option under #1.







That was a helpful answer. Thank you very much! Now that the year is about about to end I will be needing a professional help.

I read IRS Tax Guide for Aliens. I can see there that I will be able to file as as DUAL-STATUS. I will not be able to meet the SPT so what could be the basis for filing as RESIDENT for the tax year?

When I was a student, I was able to avail the Tax treaty between the Philippines and the US for 2 years - and this could be up to 5 years. 2007 is my third year, OPT from Jan to Sept and H1B for the rest of the year. Do you think I will be able to avail the full amount of treaty exemption this year? What I filed at the start of this year was W-4 and no Form 8833.

If you are NOT married, you can file either DUAL-STATUS or file as a non-resident alien.

There is normally LITTLE value-added to filing dual-status, so it would be simpler to file as a non-resident alien for 2007.

Yes, you WILL be able to take the treaty-exemption of $3,000 on your non-resident tax return (Form 1040NR or 1040NR-EZ).

Do not forget that you also need to file Form 8843 ONE LAST TIME.

In 2008, you will file as a resident alien, filing Form 1040, 1040A or 1040EZ.

1) You have a choice: You can:

- file as a non-resident alien, probably filing Form 1040NR. You would be able to claim your wife and child as dependents and claim the Child Tax Credit for your child.

- file jointly with your wife and you both CHOOSE to be treated as resident aliens. This is the RECOMMENDED OPTION, because you will only be allowed to deduct the mortgage interest and real property tax if you file this way.

In either case, you will need to apply for an Individual Tax Identification Number (ITIN) for your wife using Form W-7 if she does not have a SSN or ITIN. I assume your child has a SSN.

2) Yes.

3) Yes, under the second option under #1.

4) Yes. under either option under #1.




Atlanta Tax Expert,

Getting back to this earlier thread, can me and my wife file a joint return and be treated as resident aliens for tax purposes for the entire 2007 via the first year choice as a result of changing visa from F1 to H1-B (wife: F2 to H-4) effective October 2007?

Thanks for your help!

Yes, you can file jointly under First Year Choice as long as you were still married on 31 December 2007. You meet all of the other criteria.

If you need my help, email me at [email protected].

Yes I agree.

The best choice is to file as a Non Resident Alien 1040NR EZ.

You cannot file Dual Status.

Hope this helps!

VTE:

I told him to file jointly as resident aliens, NOT to file Form 1040NR-EZ.

And he CAN file dual-status, but filing jointly makes more sense tax-wise.

Atlanta Tax Expert,

Getting back to this earlier thread, can me and my wife file a joint return and be treated as resident aliens for tax purposes for the entire 2007 via the first year choice as a result of changing visa from F1 to H1-B (wife: F2 to H-4) effective October 2007?
Thanks for your help!

You can certainly file as Married Filing Jointly and also get deduction for your child but for that there are requirements:
1. You can file your tax return till you meet 183 days test in 2008. For that you may have to wait till around May 10, 2008 so that
1/3 (days on H-1B in 2007) + days in 2008 = 183.

2. You and your spouse must sign a statement that as a first year choice you want to be treated as residents for 2007.

3. You both must declare your worldwide income for 2007.

Or you can file as nonresident without waiting for May 2008. Then you will get your exemption of $3,400, dependent's exemption $3,400 and treaty benefit of $3,000 only. You can't claim exemption for your spouse.

If he can claim his child as a dependent, he can his wife as a dependent as well if he files NRA.

Still, filing jointly is the best course of action.

I thought that if a nonresident files a return as nonresident, and his spouse is nonresident, then his/her status is Single. Any other deduction is based on tax treaty.

NRAs file either as SINGLE or MARRIED.

SINGLE uses a SINGLE tax rate table. MARRIED uses MARRIED FILING SEPARATELY tax table.