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ucanalways · Mar 23, 2009, 12:18 AM

Hello tax experts, given below is my situation.

I am resident alien and I have a W-2 for the wages I earned in the year 2008. By mid December 2008, I went to my home country and got married. My wife got a H4 visa and we returned back to US on Jan 1st 2009. Per IRS representative, though my wife is a non-resident alien now, she can be considered as a resident alien for tax purposes. So, we are filing our federal and state tax returns for year 2008 with "Married filing jointly" status. So, should I declare both my income and my wife's foreign income for the year 2008 as wages in Line 7 of form 1040? Also, I should use form 2555 to get the foreign earned tax exclusion, right?

I wanted to make sure if I can proceed with this. Please let me know, if I can or can not.

Thanks much,
Nick

MukatA · Mar 23, 2009, 04:16 PM

Yes, you can fie joint return as residents. You will attach W7 (ITIN application) with your tax return.
You must both report your world wide income. If you paid taxes in the foreign country, you will claim credit for taxes paid in the foreign country by filing Form 1116 or can file form 2555 Foreign Earned Income Exclusion.. Read: Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income

ucanalways · Mar 23, 2009, 07:23 PM

Hello MukatA,

Thanks for that tip. Do you have an idea on the tax form I would file for the California state tax return?

There is a 540 2EZ form for residents married filing jointly and 540-NR for married filing jointly but if one spouse is a part-year resident or non-resident. I am not sure which form to file. My wife doesn't have any CA income and she was in my home country (away from US) in 2008. Still she is considered as a resident alien for tax purposes. I understand that I would have to declare ALL income while filing state taxes too. But my question is which form should I file? 540 2EZ or 540NR?

Could you help me in this?

Thanks,
Nick.

AtlantaTaxExpert · May 14, 2009, 10:52 AM

File Form 540NR due to your wife being a non-resident during 2008.

Five Rings · May 17, 2009, 11:04 AM

California does not recognize the foreign earned income exclusion. That amount will be taxed by CA.

AtlantaTaxExpert · May 18, 2009, 01:24 PM

Five Rings:

In this case, I disagree.

While HIS international income would be taxed because he was resident in the state for the entire year, HER income will not, because she was NOT physically present in the state. This can be clearly shown by her visa and passport stamps.

Five Rings · May 19, 2009, 02:21 AM

Good point; I agree