Hello tax experts,

I've been on H1-B visa since October 2007. On 2008, I lived in US for 344 days, so I meet the substantial present test.

Last year I filed a 1040NR, but this year I'd like to file a 1040 in order to claim my wife (H4 no SSN) as an exemption.

- Could she apply for a W-7 and file a joint return?

- What would be her reason for submitting a W-7?
(b) Nonresident alien filing a U.S. tax return
(c) U.S. resident alien (based on days present in the United States) filing a U.S. tax return
(e) Spouse of U.S. citizen/resident alien
(g) Dependent/spouse of a nonresident alien holding a U.S. visa

- Do we need to send a first year resident statement or is that just for dual status?

I also need to file state taxes. Do I need to wait for my wife's ITIN before filing?

Thanks in advance for your response.

In 2008 you were a resident alien by substantial presence.

To file a MFJ return you need to get your wife an ITIN. Check box e and write in your name and SS number and have a copy of her passport certified. She signs. I suggest you find a certifying acceptance agent in the area you live and have it done correctly the first time. Acceptance Agent Program (http://www.irs.gov/individuals/article/0,,id=96304,00.html)

Just attach your tax return and all necessary documents to the W-7 application and send it to the ITIN Unit directly.
Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

File an extension for your State return paying what tax you think you owe with the extension and send the return in when you get her number.

Thanks Five Rings. What about the First Year Resident Statement. Do we need to send it as well or is it just for Dual Status? Thanks!

You can file joint return as residents. Attach W7 (ITIN application) with your tax return. Do not file W7 separately.
On W7 select (e).
Read about H1-B tax filing: Your U.S. Tax Return: The U.S. Visas (http://taxipay.blogspot.com/2008/08/us-visas.html)