Ask Me Help Desk - Tax on L1 Visa

Tax on L1 Visa

I transfer from India to Texas, Houston on L1 VISA from 10-Jan-09 To 23-May-2009 that is for 5 months. During this period my wife and 4 year daughter was in India. Then I left to india for 1 month and again came back with my family spouce & daughter in 24-Jun-09. They are on L2 visa. My wife has SSN but she is not working and my daughter doesn't have SSN. Now I am here till Jun-2010. After coming back to US again my wife deliver the baby boy in 28-Aug-09.

All my stay in US is on payroll transfer. I will be incurring all the exepenses (transport, rental apartment, food, internet, telephone etc). With salary I got some bonus & car reimbursement .

I want to know when I have to pay the tax for 2009 and what is the procedure to pay the tax and do I need to show or pay tax on indian income earn during some stay in 2009.

And what are the exemption or rebate I can get from tax. And is there identification e.g ITIn is required for my daughter to claim as dependent.

Thanks in advance

"All my stay in US is on payroll transfer." Please explain.
Is your employer withholding SS tax, Medicare Tax and Federal income tax?

Yes. Employer withholding Fedral Tax, SS Tax & Medicare tax. Plus I have deduction of United Health Care Medical Standard Plan Deduction & Medical Dental insurance.

You will file jointly with your wife and you both will CHOOSE to be treated as resident aliens for all of 2009.

This way, you will benefit from filing jointly with your wife, PLUS claim BOTH of your children as dependent on your 2009 return. Both children will be eligible for the $1,000 Child Tax Credit (even though you WILL need to get an ITIN for your daughter).

You will also need to declare the Indian-sourced income earned in calendar year 2009, but you can claim the Foreign Tax Credit (Form 1116) for the Indian income taxes paid on that Indian-sourced income.

This is probably for you to file tax-wise, all factors considered.