I am on H1-B for entire 2005. I got married in March 2005 and my husband came to US on 28th July 2005 (L1 visa). I am confused about how to file tax for 2005.

1) Can we file 1040 married filing jointly? Or do we have to file separately? That is I file 1040 and my husband files 1040NR?

My husband was on f1 visa Aug 2001 - May 2003. He moved to India after that and visited US twice (duration 2 weeks each) on B1 visa once in 2004 and in 2005. I don't think he passes the 183 day test. Could you confirm?

Can my husband claim $5000 standard deduction?

2) I was on OPT from July19th 2004 - Dec 31 2004 and was on f1 visa before July 19 2004. I file 1040NR-EZ in 2004 and I did not use standard deduction $5000 ($4850 in 2004 I think) allowed for Indian students instead I showed state tax as deduction which was less than $5000. I think I could have used $5000 deduction instead as I was on OPT. Is that correct? If yes can I claim it this year?

Please advice.

Thanks in advance for any help.

1) You can and should file jointly as resident aliens. The fact that he did not meet the Substantial Presence Test is irrelevant. He will be able to claim the $5,000 standard deduction, which, along with you, means the joint standard deduction would be $10,000.

2) For 2004, you could have used the $4,850 standard deducton. However, the only way to claim that standard deduction is to amend the 2004 return using Form 1040X.

Thanks so much for the answers. Could you help me some more? I have been struggling to figure all this out for a long time now.

1) I did try using turbotax. But turbotax suggests that in order to file jointly my husband needs to show income when he wasn't in US also (he was working in India before 28th july). Is that correct? I would prefer not doing that.

2) I assume I need to send 1040X with corrected 1040NR-EZ (with $4850 deductions).

1) You have no choice. If your file jointly as a resident alien, then you must report yours and your husband's worldwide income. However, you can also claim a credit for the taxes paid in India.

2) You assume correctly.

Thanks again. I have one last query though.

Can we file separately (married filing seperately) and my husband can file as resident alien under first year choice (in early June 2006). I assume in this case he doesn't have to include world-wide income. Is that correct?

Thanks once again for your kind help.

No, that's not true. If he files as a resident alien, he must report his Indian income, whether he files jointly or separately.

If he files as a non-resident alien (Form 1040NR or 1040NR-EZ), then he does not need to report the Indian income.

Hi Altanta Tax Expert,

How do we claim credit for taxes paid in India? Is there some info/docs explaining the details. I was going through some docs on IRS.gov and I noticed something about Foreign Income exclusion. Does this apply in our scenario? My husband income in India from Jan - July 2005 must be close to $11000. He is a Indian citizen.

What forms do I need to fill for tax credit and what supporting documents will be required?

Thanks a lot for the help.

TaxHelp:

In my opinion, filing a Foreign Income Exclusion (Form 2555) or Foreign Income Tax Credit (Form 1116) should be done by a professional. It can be real tricky to be done correctly.

You can download the forms and instructions from www.irs.gov if you want to try.

A copy of your Indian tax return is the best proof that you paid the taxes in India.