Please anybody

I arrived under H1B on 16 Oct 2007 and never left the U.S. My wife and son arrived in the U.S. 27 Nov. 2007. As of today (April 1st) I've counted myself 126 days of presence towards the 183 day requirement. Can I file an extension to complete the 183 days before filing 2007 Tax return?
If the extension provides enough days for my wife to reach 183 days of presence, can we opt for First-Year choice and inlcude my wife and son in the return and get all dedictions and credits of residents?

Thank you

Yes, you should have filed the extension.

Yes, you can file jointly with your wife and you both CHOSE to be treated as resident aliens. This will allow you to claim the $10,700 joint standard deduction plus two $3,400 personal exemption (for yourself and your wife) plus one $3,400 for your child PLUS the $1,000 Child Tax Credit.

The downside is that:
• you must WAIT to meet the Substantial Test before you can file, which means you must wait until 1 June 2008.
• you must declare ALL 2007 world-wide income. There are two offsets available, by either claiming a Foreign Tax Credit (Form 1116) or a Foreign Income Exclusion (Form 2555).

Even with the downside, this is probably the best way for you to file.