Hi,

I have just arrived to US. I am on H1 visa and here along with my spouse and kid (1 year). I have my SSN with me and I'd got when I travelled here last time. That time I came alone.

I will have to apply for Income -Tax this time and I have submitted my W-4 to my company.

My questions is :

1. How can I apply for my spouse's Tax id. As she is on H4 visa she is not eligible for SSN. I need to apply for Tax id. How can I do that?

2. How can I apply for my kid's tax -id?

3. As in one of the post I've read that "to get maximum benefit you should file it as joint instead of claiming them as dependant". I did not understand this. Could you please explain me and tell me how should I file tax?

4. Can I apply for tax -id (for my wife and kid) now or I need to wait for something?
Is there any time, one should apply for tax-id?

Please help me out.

Regds,
Ni Dalal

Ni Dalal:

For both your wife and child, you must fill out one Form W-7 for each and send them, along with notarized copies of their passports, to the IRS with your 2006 tax return.

If she arrived after 1 Dec 2006, your wife cannot file as a resident alien because she did not spend at least 31 days in the United States. If so, you should file a dual-status return under First Year Choice in order to claim your wife and child as dependents.

If she arrived before 1 Dec 2006, you must wait until she meets the Substantial Presence Test (183 days in the U.S.) before you can file. This may require that you delay filing until sometime after 1 June 2007. Though you must wait until almost half of 2007 is over, you will be able file jointly with your wife as resident aliens, claiming a $10,300 double Standard Deduction.

Please contact me at [email protected] if you have further questions or need help. If you want to discuss it via phone, e-mail me your phone number.

Thanks David for quick response,

We arrived here on 18th Nov 2006. ( myself along with my wife and son).

As I understand from your reply, I should wait until I get tax return to get Tax id. Is this correct?

When will I get this? And when should I file that?

I know I am really confused and don't know how to proceed.

Thanks,
Ni Dalal

Yes, you should wait until you file your tax return before submitting the W-7s and the notarized photocopies of their passports.

You file your 2006 tax return with your wife's and child's name entered on the tax return, but the SSN areas BLANK! The IRS will issue the ITINs, fill in these ITINs on the return, and process it. They will then send you the ITINs in a separate letter addressed to the address on the tax return.

Once you get the ITINs, you can then file the state tax return.

Now, how should you file?

NON-RESIDENT TAX RETURN (FORM 1040NR-EZ): Since you arrived on 18 Nov 06, you only have about 45 days worth of pay to report. This being the case, you MAY be able to file a non-resident return claiming ONLY your own personal exemption. If your total 2006 income from your H-1 job is less than $3,300, then file a non-resident tax return (Form 1040NR-EZ), because you will owe ZERO tax and will not need your wife's or your child's personal exemption to offset any tax owed.

DUAL-STATUS RETURN (FORM 1040 with Form 1040NR attached): If your 2006 H-1 income is greater than $3,300, but less than $9,900, you should file the dual-status return. This allows you to claim your wife and child as dependents and use their $3,300 personal exemption without having your foreign-based income taxed. You will report the foreign-based income on your tax return using Form 1040NR, but it will NOT be taxed by the U.S.

RESIDENT ALIEN (FORM 1040): If your H-1 income for 2006 exceeds $9,900, then you maybe should wait until mid-2007 and file as a resident alien. You will then get $9,900 in personal exemptions PLUS an additional $10,300 in standard deductions.

On ANY of these three returns, you CAN claim moving expenses from India to the U.S. if you received no reimbursement for these expenses.

You are real Expert! As your name says... :-)

David,

To Summarize my understanding:

1. I need to go for DUAL-STATUS RETURN for tax filing, as my stay in 2006 is less than 45 days and my H1 job salary is ($7300 for 45 days) les than 9900$.

2. I will get $3300 excemption for myself, my spouse and son ( so total would be $9900) or it will be for my spouse and kid only (total would be $6600)

3. In W-7 form I will have to go for block g ( Dependant/Spouse of a nonresident alient holding a US visa). Is this correct?

4. I can claim for moving expenses from India to US. (for my wife and son as I have paid for it and it was not reimbursed by my company).

5. My earning for 2006 in india won't be taxed here. Correct?

Question 1. my company has already deducted some amount as Tax in Nov salary ($500). Will I get refund for this amount? How can I claim for th refund?

2. What do you think? How much tax will come for me? Please give me rough figure. (for 2006)

Thanks and God bless you,
Ni Dalal

1, 2, 4, 5) Correct. Dual status is the way to go as you EACH get a $3,300 exemption for a total of $9,900. However, if your moving expenses (principally the airline tickets for yourself and your family, but also the cost of shipping your personal effects), exceeds $4,000, then you should file as a non-resident alien, since the combination of your personal exemption and your moving expenses will exceed your 2006 salary. In either case, your 2006earnings in India will NOT be taxed.

3) Correct. Check Block G.

Question 1: You should get all the withheld taxes back as a refund. It will be sent to you in a check or deposited directly into your bank about 4-6 weeks after you file your 2006 tax return.

2. Whatever is withheld should be refunded to you for the federal tax. The state tax is another story; depends on which state.

Hi Expert,

Now I have got my W-2 form.

Should I go for filing it along with application for Tax-id for my spouse and kid?

Also, I heard that while filing tax returns for 2006 year, I should have documents for 2005 as well.

Is this required?

I have all documents in India. Will the photocopy of all these documents work for me?

Regds,
Ni Dalal

Ni Dalai:

Legible photocopies are just fine. The passport photocopy has to be notarized (can be done at any bank).

If you need my professional tax help, contact me at [email protected].