Hi

I came to USA in march2007 with my wife and son. I am a L1 visa holder and my wife and son are in L2. Am I a resident or non resident alien?
My wife doesn't work but has SSN . Am I eligible for Child Tax Credit?
I want to ask which status we should file. Can we file jointly?
Thank you

You have already completed 183 days in the U.S. so you will file as resident for tax purposes. You wife is also resident.
You can file as Married Filing Jointly and claim your son as dependent. As married filing jointly, your standard deduction is $10,700 and two exemptions of $3,400 each. Then you will get exemption for your child... another $3,400. Yes you are eligible for Child Tax Credit. Thus you have total deductions of $23,900. Child tax credit is $1,000.

With your tax return form 1040, you will file forms W7 for both your wife and your son to get Individual Income Tax Identification Numbers.

Well, I don't completely agree with MukatA. You are a dual status alien but you have the option to elect residency, if you file jointly with your wife and both make the election for the full year. This would necessitate including your worldwide income (including income you made before you came to the US) and claiming a foreign tax credit for foreign taxes paid.

Agree with TTE. The world-wide income aspect MAY dictate that you should file dual-status, but, more than likely, claiming your wife's and son's personal exemption PLUS the Child Tax Credit PLUS the Foreign Tax Credit will more than offset any taxes you would pay on your world-wide income.

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

Hello

I disagree with TTE and agree totally with Mukta.

You are not Dual status, you are more than 183 days
You are a Resident based on substantial presence test.

File form 1040 and form w7

(even if you are dual status,it's a choice to take , not mandatory)

Go ahead file as resident the right choice.

Feel free to contact for Tax preparation service.

Hope it helps!

Thanks for all the replies.

For my L1 visa status from march 07 and having my wife and son, I have worked out the W4 form with 7 exemptions. Is that right? Should I have worked out a lesser exemptions.Please clarify.

Will this imply me to pay out more taxes after my returning?

Quote:

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Originally Posted by Visa Taxes Expert

hello

I disagree with TTE and agree totally with Mukta.

You are not Dual status, you are more than 183 days
you are a Resident based on substantial presence test.

File form 1040 and form w7

(even if you are dual status,its a choice to take , not mandatory)

Go ahead file as resident the right choice.

Feel free to contact for Tax preparation service.

Hope it helps!

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VTE and MukatA are factually wrong. You are must file dual status for 2007 unless you and your wife file together and elect to be resident for a full year. I'm more than happy to provide citations from the Internal Revenue Code if you need them.

ChicagoBlue:

Even if you file jointly with your wife, SEVEN exemptions are too many. But it's too late now for 2007. Hopefully, enough was withheld to meet your 2007 tax obligations.

Change your 2008 W-4 to FIVE exemptions.

BTW, I agree with TTE. While I sometimes disagree with some interpretations of the tax code, I have learned that he is RARELY wrong when it comes to a simple interpretation like this.

Quote:

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Originally Posted by The Texas Tax Expert

VTE and MukatA are factually wrong. You are must file dual status for 2007 unless you and your wife file together and elect to be resident for a full year. I'm more than happy to provide citations from the Internal Revenue Code if you need them.

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Can you provide me with more details.And let me know which form I should file the return.

ChicagoBlue:

If you file jointly and you BOTH choose to be treated as resident aliens, you would file Form 1040, Form 3903 (to claim moving expenses) and Form 1116 (to claim the Foreign Tax Credit). You also need to attach a statement (signed by BOTH you and your spouse) to the return stating that you qualify to file under First Year Choice and that you CHOOSE to be treated as resident aliens for all of 2007. This is probably the best way to go.

If you file dual-status, you file all of the forms above (but NOT the statemet) PLUS Form 1040NR. However, the dual-status return is NOT FOR AMATEURS. In fact. It is not for MOST tax professionals. You need someone who specializes in such returns, like me or TTE.

If you want my professional help, contact me at [email protected].

ATE is correct. You need to look at your situation and ascertain whether you are better off electing residency or filing dual status.

There is a simple point that I would like to make. Many tax practitioners might be very good at basic US work but they really have limited knowledge of how to deal with non-residents and international issues. You need to be careful whom you listen to. Unless you are confident, they may be selling you incorrect information (even if unintentionally).

Good luck.

Well said, TTE.

Unfortunately, the tax preparer industry is filled with those who do little more than key in tax data to tax software and rely on the software to do all the work.

In most cases, this is good enough, but taxes for foreign nationals is VERY dependent on tax treaties and individual circumstances.

Be VERY careful who you use to prepare your tax return.

It is a great correct answer.