Hi

I came to USA on H1B visa and working here ever since. As on Dec 31 2007, I have completed 181 days in the USA. I will continue to stay in USA for entire 2008 as well.

Please clarify on the following queries :

1. Am I supposed to do resident or non-resident tax filing?

2. From July to Oct 2007, I have paid taxes in my home country. I understand that I am eligible to get some refund under Foreign Tax Credit if I file for the same. Should this be done alongside US resident tax filing or non-resident tax filing?

3. What proofs must I furnish for claiming Foreign Tax Credit?

Thanks
Cyrus

Hello Sir

You have to be in US , more than 183 days to clear the Substantial Presence Test.

In your case, you are considered a Non Resident Alien as you fail to meet the Substantial Presence Test.

So you have to file Form 1040NR EZ

Can you please tell me which country are you from?

Thanks

Hi

Thanks for the prompt clarification.

I am from India. So if I do not pass the substantial presence test, does it mean that I cannot claim foreign tax credit?

Also, if I count my days in the US in 2008 then I do clear the test by April 2008. Does it then allow me to file as resident(and therefore file 1116 as well) ?

Please clarify.

Thanks
Cyrus

Cyrus:

Are you married? If so, you can file JOINTLY with your spouse and you BOTH choose to be treated as resident aliens. In that case, you would declare ALL of your 2007 world-wide income and file Form 1040 along with 1116 to claim the Foreign Tax Credit and probably Form 3903 to claim moving expenses. This option is available to you ONLY IF you are married.

If single, you would file as a non-resident alien, filng Form 1040NR plus Form 3903 (for moving expenses), but you would claim ONLY U.S.-sourced income. You could file dual-status, but it is likely that there would be NO tax advantage to doing so.

If you want professional help, contact me via email at the address below.

Hello AtlantaExpert

No I am not married. I am single with no dependents in the US.

I thought I could file 1116 to get refund on Double Taxation, irrespective of whether I am married or not. Could I not file 1040NR EZ, 1116 and 3903 all together?

If the above is not constitutionally possible, then could I not file 1040(as resident) + 1116 + 3903, even though I am unmarried?

Please explain as I am a bit confused.

-Cyrus

If you file Form 1040NR (NOT 1040NR-EZ), you report and pay taxes ONLY ON U.S.-sourced income.

You would also file Form 1116 to cvlaim a credit for the taxes you paid to India if you paid taxes to India on the SAME income.

Finally, you would also file Form 3903 to claim the moving expenses.