I have a few questions needing clarifications about filing taxes on L1 visa.

I am married and have submitted the W4 to my employer. My spouse does not work.

1. To file taxes, does my spouse need a SSN?

2. Do I need to file tax as "Married filing jointly"?

Please let me know options here

TIA

Orange

Orange:

If you have been in the U.S. for ALL of 2007, then you must file as a resident alien. Filing jointly is the preferred option tax-wise, which means your spouse will need a Individual Tax Identification Number (ITIN), which can be appplied for with Form W-7. You CAN file Married Filing Separately, but I see no reason to do so.

If you just arrived in the U.S. you can file a non-resident alien return (Form 1040NR or 1040NR-EZ) for 2007. You will NOT be able to claim your wife as a dependent.

If you just arrived and will be in the U.S. for OVER 183 days total, you have the OPTION of filing jointly with your wife for 2007 as resident aliens, but that will make ALL of your 2007 world-wide income subject to U.S. taxes.

What country are you from? The advice given above is rather generic. Your country may have a tax treaty with the U.S. that gives you special treatment.

I am from India and have been in US for all of 2007. This will be my first filing of US returns.
As per your posting, I understand that I can file jointly as a resident alien. However, one more question I have here?
My spouse doesn't have an ITIN. Do you mean to say that ITIN can be applied while we both file the tax jointly? What form do I need to use to file taxes in that case,

TIA

The form to apply for an ITIN is W-7. There is also a statement you both must sign and attach to the tax return.

If you need professional help filing for 2007, email me at [email protected] for a fee quote.

You will find my service well worth the VERY reasonable price.

You will file as a resident alien Form 1040EZ/1040A/1040. You can elect to treat your non-resident spouse as resident for tax purposes. You must first get ITIN (Individual Taxpayer Identification Number).

And the year you get ITIN for your spouse, you must file as Married Filing Jointly. You can't file as Married Filing Separately for the first year. You must report your worldwide income and your spouse's world wide income. If you had income in a foreign country and paid taxes in the country, they you will get foreign tax credit on your Form 1040.

If you were in the U.S. under a L-1 visa EVERY day in 2007, then you will file as a resident alien regardless of your marital status.

Like MukatA said, your wife can file jointly with you as a non-resident alien spouse of a resident alien.

MukatA is wrong, however, about being required to file jointly on order to get the ITIN. You CAN file Married Filing Separately and claim your non-resident alien spouse as a dependent. In doing so, she will need an ITIN, and the IRS will issue her one for that purpose. However, claiming her as a dependent makes no sense, because filing jointly results is a significant tax break.

The rest of MukatA's post about filing jointly and claiming ALL world-wide income is accurate.

On the U.S. tax return a U.S. citizen can't claim the spouse as dependent, a spouse is never a dependent for the federal income tax.
I really don't know if a L1 visa holder can file as Married Filing Separately and claim the spouse as dependent.

MukatA:

You CAN claim a non-resident alien spouse as a dependent.

Download IRS Pub 17 for 2007 and read page 13, first column, near the bottom.

Yes, I have gone through page 13 of IRS Publication 17 for 2007. If your spouse is non-resident alien, you can file a separate return and claim exemption for your spouse.

Excellent!