[Ruchika.aneja]

Hi,

I have just moved from India for 2-3 years on a L1 visa in August 2010 with my husband who is on a F1 visa. I wanted to check whether for 2010 I would be a resident or a non resident alien? Further, in either case whether my income in India for the period prior to August 2010 will be taxable in US. My period of stay in US for the year 2010 is less than 183 days. Can I use the first time residency benefit and claim to be resident alien since then I can take the benefit of 'Married fining jointly'.

Thanks
Ruchika

[AtlantaTaxExpert]

Ruckika:

You can file jointly with your husband and you both CHOOSE to be treated as resident aliens. This will allow you to claim the $11,700 joint standard deduction plus two $3,800 personal exemption (for yourself and your husband).


The downside is that:

• You must wait until sometime in May 2010 to meet the Substantial Presence Test before you can file for Tax Year 2010.
• You must declare ALL 2010 world-wide income (wife's home country income, if applicable). There is an offset available by either claiming the Foreign Tax Credit (Form 1116) or to claim the Foreign Earned Income Exclusion (Form 2555).

Even with the downside, this is probably the best way for you to file.

[wnhough]

QUOTE," You must wait until sometime "in May 2010" to meet the Substantial Presence Test before you can file for Tax Year 2010."---??



" in either case whether my income in India for the period prior to August 2010 will be taxable in US. My period of stay in US for the year 2010 is less than 183 days."---Your income in the US is also subject to FICA Txes, Social Security Taxes, Federal and State, local taxes( if applicable) and your days in the US counts towards your substantial presence test.

[MukatA]

Ruchika.aneja:
You can file nonresident tax return or choose to file joint return as residents after you complete SPT in 2010. Your U.S. Tax Return: Substantial Presence Test
You can also claim moving expenses using Form 3903.