Ask Me Help Desk - Income Tax-Dual status alien

Hi all,

I was a resident (F1-student) of US until the end of June 2008 and then I left for Canada for a job. I was a US resident for tax purposes for years 2006 and 2007. Since I did not reside in US for 183 days in 2008, I think I am considered a resident until end of June and a non-resident from July ("dual-status alien"). I am married and my wife was also a resident for tax purposes for years 2006 and 2007. I have a child who was born in March 2008 in US.

Now, I've got my w-2's and I am trying to figure out the taxes. I have several questions:

1) From what I've read on IRS.gov, I need to file forms 1040 and 1040NR. Do I need to provide any other form (ex: 8840) to IRS? Do my wife and myself have to provide a letter saying that we left the US on a particular date ("residency termination date")?
2) Myself and my wife have to file "married filing separately", right?
3) Do I need to only fill 1040 and leave the 1040NR blank since I did not get any US income when I was a non-resident?
4) What deduction can I make? Can I include hospital expenses for my child birth, insurance payments, etc as itemized deductions? Is it correct that I cannot claim standard deduction ($3000? ) under dual status?
5) Can I claim my wife (who worked for 2 months) and child as dependent?

Any help will be greatly appreciated. Thank you all.

When did you enter the U.S. on F1?
How did you conclude that you were resident for 2006 and 2007?
Read about F1 tax filing: Your U.S. Tax Return: The U.S. Visas

I entered the US in 2001, so I became resident for tax purpose in 2006 and 2007. Since I left the US within the 183 period in 2008, according to the IRS website, I am considered a non-resident for tax purposes. As I was a resident for part of the year and a non-resident for later part of the year, I am a dual status person. Thank you.

1) You are dual-status. The dual-status tax return will serve as your termination notice, as you provide your exit date on the Form 1040NR.

2) No; you can claim your wife and child as dependent if they have no U.S.-soruced income. If your wife does have U.S.-sourced income, then she needs to file a dual-status return as well.

3) The Form 1040NR (you can use use 1040NR-EZ as well) provides demographic data plus information about when you left the U.S.

4) Yes, you CAN claim the medical costs on the normal Schedule A that is attached to the Form 1040. No, you CANNOT claim the $5,450 standard deduction.

5) As noted above, you CAN claim the child as your depentent, but not your wife. She has to file her own dual-status return.

It is my belief that a dual-status return is not a return for an amateur! You should professional tax help by someone with experience filing dual-status returns.

Quote:

Originally Posted by AtlantaTaxExpert

1) You are dual-status. The dual-status tax return will serve as your termination notice, as you provide your exit date on the Form 1040NR.

2) No; you can claim your wife and child as dependent if they have no U.S.-soruced income. If your wife does have U.S.-sourced income, then she needs to file a dual-status return as well.

3) The Form 1040NR (you can use use 1040NR-EZ as well) provides demographic data plus information about when you left the U.S.

4) Yes, you CAN claim the medical costs on the normal Schedule A that is attached to the Form 1040. No, you CANNOT claim the $5,450 standard deduction.

5) As noted above, you CAN claim the child as your depentent, but not your wife. She has to file her own dual-status return.

It is my belief that a dual-status return is not a return for an amateur! You should professional tax help by someone with experience filing dual-status returns.

Thanks Atlanta Expert for your very useful reply for my previous post. You are doing a great job helping foreign tax filers. In my situation, I thought I need to file form 8840 to claim exemption under closer ties to a foreign country. But since I am a dual status person and I am technically a non-resident after I left the US, I need not file that form, I think. I have a question on my wife's taxes. Can she claim an exemption for herself (line 6a form 1040) for $3500? Her total income in US was about 5K for 2008. Also, another question. Is there a penalty for late filing? I remember reading somewhere on IRS.gov that for foreign tax filers not in US, the deadline is June 15. Is that right? Thank you very much.

Kris

Kris:

If you have a refund coming, do not worry about the 15 April 2009 filing deadline.

Your wife CAN claim her own $3,500 personal exemption on her dual-status return.

No Form 8840 is required if you file dual-status.