Hi,

I had just traveled (11 May 2010) to US on L1 VISA with my non-working dependents on L2 (spouse and kid).
I have not traveled US before. Now, I have to fill W-4 form for tax deductions. I have the following queries:
1. It seems that I am a non-immigrant alien as I do not satisfy the criterion mentioned. Am I right?

2. Can I save some taxes by filling W-4 and exemptions for my dependents in this case now? OR Should I wait for tax return next year and claim for the deductions? (my stay will me more than 183 days)

3. If no, any other way to save taxes now?

4. Do I need a ITIN numbers for my dependents to claim for extra tax paid in tax returns? If yes, can I get these now?

Regds,
Shailendra Rathaur

1) That is correct, though the actual term is non-resident alien.

2) As a foreign national, the most allowances you can claim is MARRIED with TWO allowances. This is an IRS rule to ensure that enough tax is withheld from your salary to cover any potential tax liability you may have.

3) No.

4) You WILL need to submit Form W-7 when you file your 2010 tax return to get ITINs for your wife and child.

Quote:

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Originally Posted by AtlantaTaxExpert

1) That is correct, though the actual term is non-resident alien.

2) As a foreign national, the most allowances you can claim is MARRIED with TWO allowances. This is an IRS rule to ensure that enough tax is withheld from your salary to cover any potential tax liability you may have.

3) No.

4) You WILL need to submit Form W-7 when you file your 2010 tax return to get ITINs for your wife and child.

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Thanks for the information...
From all the information, as I am NRA, I can withheld only 1 allowance. I am not sure of 2 allowances if married (1,2 of worksheet most probably). Can you confirm the information above? I have a child also.

But, after completion of this financial year and my 183 days stay, I can get back my extra tax deducted while filing for 2010 tax return in next year 2011. Is this correct? (like the amount deducted for not claiming for marriage and child dependent)

At that time if I complete 183 I will be termed as RA and not NRA if I am right. If I will be an RA, do I need ITIN numbers for dependents for claiming back deductions.

Under an option called First Year Choice, you WILL be allowed to file jointly with your wife and claim your child as a dependent (plus claim the $1,000 Child Tax Credit), provided you and your wife CHOOSE to be treated as resident aliens for all of 2010 AND provided you claim ALL world-wide income earned in 2010.

Since this is likely the BEST way to file, you should claim MARRIED with TWO allowances, which is the MOST numbers of allowances you are allowed to claim.

By filing jointly, you will pay the least amount of tax and get a much larger refund than if you filed a dual-status return (that is your other permitted filing option).

Yes, your wife and child will need to submit Form W-7 to get ITINs. The Form W-7 is submitted with the 2010 tax return.

As I am unsure of 183 days in this financial year. So, I am going to fill Single in W-4 and withhold for only 1 allowance.
Anyway if my 183 days will over then I can claim the extra tax back while filing return for me jointly with dependants.

Understand that the W-4 is NOT a tax return; it is merely a guide that tells the employer how much federal income tax to withhold from your salary.

That being the case, when you file your 2010, you will reconcile what was withheld with what is acutally due in taxes.

More than likely, you will get a refund regardless of how you file.

If you file jointly, the refund will be substantially larger than if you file dual-status, all thing being equal.

Quote:

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Originally Posted by AtlantaTaxExpert

Understand that the W-4 is NOT a tax return; it is merely a guide that tells the employer how much federal income tax to withhold from your salary.

That being the case, when you file your 2010, you will reconcile what was withheld with what is acutally due in taxes.

More than likely, you will get a refund regardless of how you file.

If you file jointly, the refund will be substantially larger than if you file dual-status, all thing being equal.

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Hi,
I understand that W-4 is not tax return. It is just the tax withhold for employer. As I am still unsure of my duration of stay. So, I will better withhold less right now and pay taxes applicable. If later my stay got extended (>183) anyhow I will be getting the extra tax paid back (filing jointly for my dependents).