Hi,
I came to US on 9/27/08 with H1B visa. I'm married, made more than $3500 in 2008 and I'm planning to stay in US in 2009.
I got my W2 from the employer with all standard withholdings. So far, from all the forums and IRS website, I've figured out that I need to file 1040NR since I don't pass the two tests for RA. But there are still some things that are very confusing... I would really appreciate if someone can provide clear understanding on those..


Questions:
1. My spouse is here on H4. Can I file a joint tax? Is there anything us-india tax treaty for this? Is this treaty helpful to me in any way?
2. can I take standard deduction? Or do I need itemized. Forums were very confusing on this part...
3. are there any other ways to save on taxes? I'm renting and commuting on bus from apartment to work
4. should I just file for extension and wait till I can opt for residential tax filing? Both my spouse and I had income in india for 2008.
5. what about state tax? I'm California?

Thank you.. I know many newcomers like me are searching for clear cut anwers on these questions... please help...

You have two choices.
Choice 1: If you did not complete SPT in 2008, you can file non-resident tax return. You can claim moving expenses.

Choice 2: You can file resident tax return as Married Filing Jointly.
You will have to wait to file your tax return till you meet the Substantial Presence Test in 2009.

You will get standard deduction of $10,900 and exemptions for both of you

You must both declare your worldwide income for 2008. If you have any foreign income, and on that income you paid taxes in the foreign country, then you can claim foreign tax credit (Form 1116) or you can use Foreign Earned Income Exclusion (Form 2555).

You will complete forms W7 (application for ITIN) for your spouse and attach with your tax return. You can also deduct moving expenses. Use form 3903.
Read about H1-B tax filing: Your U.S. Tax Return: The U.S. Visas

OK so if I file a non-resident tax return, there is NO standard deduction and I cannot file married joint return. I've to go with itemized deductions and deduct moving expenses.. us-india tax treaty doesn't help at all.

On the other hand, I can file resident tax just like any other regular tax filing after passing spt this year. I can still deduct moving expenses. Plus I need to report worldwide income and use form 1116/2555 to deduct foreign income.

Thanks

Quote:

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Originally Posted by MukatA

You have two choices.
Choice 1: If you did not complete SPT in 2008, you can file non-resident tax return. You can claim moving expenses.

Choice 2: You can file resident tax return as Married Filing Jointly.
You will have to wait to file your tax return till you meet the Substantial Presence Test in 2009.

You will get standard deduction of $10,900 and exemptions for both of you

You must both declare your worldwide income for 2008. If you have any foreign income, and on that income you paid taxes in the foreign country, then you can claim foreign tax credit (Form 1116) or you can use Foreign Earned Income Exclusion (Form 2555).

You will complete forms W7 (application for ITIN) for your spouse and attach with your tax return. You can also deduct moving expenses. Use form 3903.
Read about H1-B tax filing: Your U.S. Tax Return: The U.S. Visas

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