Hello,
I have two questions for the tax expert...
First question: I hold an H1-B visa since October 2007 ( I am in the process of getting my green card)and I stayed for most of 2008 in the U.S. Thus, I am pretty sure that I meet the presence test and I can file as an U.S. resident. However, I am single and I rent so when I compare the 1040 and the 1040NR forms, I see that it is better for me to file the 1040NR because I have around $3,800 in itemized deductions and a personal exemption of $3,500 for a total of $7,300 versus an standard deduction of $5,450 if I use the 1040 form. My question is... Can I choose to file the 1040NR? Or I must file 1040?
Second question: I read publication 5450 about the first time homebuyer credit... The rules say clearly that if you are a nonresident alien, you cannot claim it. My question is... I hold an H1B visa and I am in the process of getting a green card. If I file 1040 for tax purposes, do I have the right to claim this credit if I decide to buy a house by May this year? THANKSSS!!

For 2008, you must file resident tax return. You will get recovery rebate and first time homebuyer credit if you meet the requirements.
Your U.S. Tax Return: First-Time Homebuyer Credit

Actually if you stayed for "most" of 2008, you might actually be a dual status alien. We can't ascertain that without more information.

Since you started H1-B in 2007, you will file resident return in 2008.

No, TTE has it right; we need a specific timeline for how long he was in the U.S. to determine if filing as a dual-status alien is the correct way to file.