Hi,

I came to US on August 15 on H1-B. Since then I am in US only and will be there for full 2007 year.
I understood that I need to file 1040NR for my income for year 2006. But I heard there is something first year choice through which I can file 1040 as resident to take advantage of deduction.
Is it possible?
If yes then what I need to do?
Do I need to file extension and in June or so file 1040 as resident with first year choice?

Thanks

Are you married or single? Assuming single:

1. You are currently NR for 2006.

2. If you wait until you meet the SPT for 2007, you can elect to be a dual status alien in 2006. This is much more complicated. I doubt that it will advantage you, but it might do, depending on your circumstances.

I am married and have a kid (3 yrs). My wife and kid is here since 5th Sept 2006

Can I apply for extension?
And after extension is it possible that I am being consider as resident for year 2006 so that I can get max deduction including std deduction, child tax credit, additional child tax credit etc etc?

You and your wife may delay filing until you meet the SPT and then elect to file as residents (together) for the full year of 2006. The disadvantage is that you must report your worldwide income (from all sources) and then claim a foreign tax credit. This might work out better, however, than being NR, depending on your circumstances.

Thanks...

I think I will need your professional help know. I am sending a PM to you.

Actually by mistake I already filed form 1040 and expecting a return of 2500 or so.
Let me know what do know?

Regards
Rahul

Rahul:

Did you wife and child already have ITINs?

Rahul,

It largely depends on whether the 1040 you submitted was correct. If you only missed including the elections, this is very easily fixed. If you filed a 1040 as a resident but didn't include the foreign income etc you may need to revisit it.

Quote:

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Originally Posted by AtlantaTaxExpert

Rahul:

Did you wife and child already have ITINs?

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No. I sent the w7s alongwith my 1040 to ITIN dept 3 weeks ago.

Quote:

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Originally Posted by taxsearcher

Rahul,

It largely depends on whether the 1040 you submitted was correct. If you only missed including the elections, this is very easily fixed. If you filed a 1040 as a resident but didn't include the foreign income etc you may need to revisit it.

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As per my knowledge it was correct. I had made no selection for elections. So we can file 1040x to amend that decision.

I did not include my foreign income as after coming here I had no foreign income.

Let me know how to go with this?

Do I need to fill 1040x (amend)?
Is it possible to get extension with 1040x?
Or I do not need to do anything and the IRS will reject my 1040?
But if I file as NR then I owe about $700 more tax. And if the IRS does not reject my 1040 then I will get return of more then $2500. Then the total I owe is around $3200. I am sure then there will be a penalty..

It is likely the IRS will NOT reject the tax return. The fact that you filed too early is a violation of the rules, but the problem resolves itself if you remain the U.S. to hit the SPT point in time.

I recommend you do NOTHING until the ITINs come back or unless the IRS rejects the return because you have not met SPT. If they do reject it, just hold it until you meet the SPT, then re-submit.

Quote:

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Originally Posted by AtlantaTaxExpert

It is likely the IRS will NOT reject the tax return. The fact that you filed too early is a violation of the rules, but the problem resolves itself if you remain the U.S. to hit the SPT point in time.

I recommend you do NOTHING until the ITINs come back or unless the IRS rejects the return because you have not met SPT. If they do reject it, just hold it until you meet the SPT, then re-submit.

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Thank you very much ATE.

Glad to help!