Hi My wife holds a J1 visa (visiting researcher) since October, 2007. We got married in 2008. I am a US citizen. My questions:
1. Can she file 2008 tax as married-filing-jointly with me using 1040 form?
2. Do I include her salary income (exempt from federal income tax as tax treaty benefits) on the joint return? If so, where is her income added (she does not have W-2 but 1042-S from her university?
Thanks,
David

Yes, you can file joint return as residents. Then her J1 income is taxable. Also she must start paying FICA taxes from Jan 2009.
Report 1042-S income where you put W2 income.

Thanks million.

It would be better if you filed Married Filing Separately and she retain her tax-exmpt status. However, YOU can claim HER personal exemption on your return if she is not using it.