Hello,

I actually need help from someone who is also aware of immigration law for my question. I am currently on my H1 and my wife just got her H1 approved this year. She has been on an H4 until now. We just applied for her SSN and will be receiving it in 2 weeks. My question is as follows:

1) Can I still claim her as a dependent when I file for the 2008 tax returns in 2009? This is of course considering that she is only going to start working from January 2009 onwards.

2) Would it be illegal for her to not work until December 2008 despite being granted her H1 work permit?

3) My current visa expires in march 2009. I have already filed for an extension. We did not file for her H4 extension since she already got her H1 approved. When we leave the country in June 2009 for vacation, will there be a problem when getting her visa stamped because she did not work in 2008?

The reason I am asking all these questions is that I don't want to have to forego the 5000$ tax credit just because she would have worked one month in the whole of the year of 2008. I hope there is someone who can answer this question with authority and knowledge.

Thanks.

1) If you file jointly with her, her visa status (H-1 or H-4) is irrelevent. When you file jointly, she is NOT your dependent; she is your co-filer. Tax-wise, filing jointly is probably the best course of action.

2) She can start working on the effective date of the H-1 visa, which is probably 1 October 2008.

3) Probably not, but you can fix this problem with a quick trip to Mexico or Canada to get her H-1 visa issued.

As for the $5,000 tax credit, which credit would that be?

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Originally Posted by AtlantaTaxExpert

1) If you file jointly with her, her visa status (H-1 or H-4) is irrelevent. When you file jointly, she is NOT your dependent; she is your co-filer. Tax-wise, filing jointly is probably the best course of action.

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That's what I meant, my usage of the word "dependent" might be wrong. I guess I was confusing it with her dependent status from an INS Perspective.

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2) She can start working on the effective date of the H-1 visa, which is probably 1 October 2008.

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Would it be illegal if she did not immediately start working from OCT. Is it okay if she starts working from JAN 09. I mean, she hasn't even received her SSN yet.

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3) Probably not, but you can fix this problem with a quick trip to Mexico or Canada to get her H-1 visa issued.

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This is an option I Have been looking at, but I would like to avoid it for now if she can legally start working from JAN 09.

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As for the $5,000 tax credit, which credit would that be?

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Let me remember this right, I believe it was called the standard deduction, and the only reason I qualified for it last year was because she did not have any earnings to report, or at-least that's what I remember the H&R Block representative telling me.

Thank you very much for your response, I hope you'll be able to guide me through this rather messy situation I am in.

From the INS viewpoint, she probably IS considered to be your dependent. Tax-wise, though, she is your equal.

As to the legality of her waiting to work, that is a LEGAL question best posted on the LAW Forum under Immigration Law.

The standard deduction is NOT a credit, it is a deduction; there is a BIG difference.

The standard deduction for a single person is $5,450; the joint standard deduction is $10,900. You qualify for the joint standard deduction by filing jointly, which you can do whether she has income or not.

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Originally Posted by AtlantaTaxExpert

As to the legality of her waiting to work, that is a LEGAL question best posted on the LAW Forum under Immigration Law.

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The standard deduction is NOT a credit, it is a deduction; there is a BIG difference.

The standard deduction for a single person is $5,450; the joint standard deduction is $10,900. You qualify for the joint standard deduction by filing jointly, which you can do whether she has income or not.

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Does this mean that even if she works in 2008, we will still qualify for this deduction?

Please forgive my loose/inappropriate use of terms, I am a complete noob when it comes to taxation.

Yes, you still qualify for the deduction whether she works or not, just so long as you file jointly.