Filing jointly or separtely
Hi,
I am on H1 and came to US in Jan 2005. My wife came to US in April 2005 on H4. She changed her status to F1 in Aug 2005. She doesn't have an income in year 2005 and she has started getting scholarship starting Feb 2006. We paid $4000 as her 2005 tution fees. As I am a resident alien, I can show her as my dependent while filing returns for 2005. Filing Married jointly will turn out to be low tax for me, as well we can get tax credit (Life time credit) for her tution fees. So in total this will save $4000 for me year 2005.
Now my question is that if I show her my dependent in year 2005, will she need to pay Social security/medicare tax for year 2006 income. Rightnow her school is deducting only the federal tax. Do we need to pay social security/ medicare tax even if her school is not deducting? What will happen when she start working on OPT? Do she need to inform her employer that she is filing her returns as resident alien with me.
Or can she file separately for year 2006 income?
Please let me know which filing status will be more beneficial for us. Provided she doesn't have an income in 2005 and she will have income in 2006 and 2007.
Please reply.
Thanks
Rohit