[Sunny Yang]

Hello,

I have been working on H1B since July 21st. 2008 after I finished my work in Germany until July 14th 2008. My husband and I are both Chinese and got married in 1997. Now he is still in Germany and work there. We have one 7-year old daughter living with me in US. I have the following questions:
1. Since I do not meet the substantial presence test for tax year 2008, I should file 2008 tax return as non-resident, is it right?
2. Should I file Form 1040NR? If so, in the Form 1040NR, my filing status is “Other married nonresident alien” with my daughter as my dependent? Should I apply TIN for my daughter and husband since they have no TIN yet?
3. Which tax treaty should I follow: between US and Germany, or between US and China.
Please let me know ASAP. Thank you very much in advance!

[MukatA]

Choice 1: File nonresident tax return.

Choice 2: You can file resident tax return as Married Filing Jointly. You will have to wait to file your tax return till you meet the Substantial Presence Test in 2009.

You will get standard deduction of $10,900 and exemptions for both of you and the kid.

You must both declare your worldwide income for 2008. If you have any foreign income, and on that income you paid taxes in the foreign country, then you can claim foreign tax credit (Form 1116) or you can use Foreign Earned Income Exclusion (Form 2555).

You will complete forms W7 (application for ITIN) for your spouse and children and attach with your tax return.
Read about H1-B tax filing: Your U.S. Tax Return: The U.S. Visas

[Sunny Yang]

Thank MukatA!

If I take choice 1, may I treated as tax treaty between China and US (please refer http://taxipay.blogspot.com/2008/04/...eachers.html)?

If I take Choice 2, I will have to file my tax return at least till the middle of July 2009 (it means I meet the Substantial presence test in 2009 with more than 183 days in US)? Or till the end of January 2009 (the sum of presence days in 2008 and presence days in 2009 together)?

Choice 1 and 2, which one is better to me? Please suggest!