[harimp]

Hi,

I came here on H1B on Apr 2006, and my wife came here on H4 (not eligible for work) on Sep 1, 2006. As this is my first tax returns year here in U.S. I have some queries on tax return.

1. Under which category we can file the tax return? (Please consider our arrival dates to give the category)

2. Today I have gone to HR Block to file my tax returns, they are saying as my wife doesn't have SSN, I have to file as single and filed in that status. At the end instead of getting any refund they showed me I OWE money to IRS.

After going through the queries here, I felt they are wrong. Please correct me if I am wrong and I felt I can file under "married filed jointly" category. However in irorder to file in that category I have to get ITIN no for my wife (as she is not eligible for SSN)

To get ITIN No do I need to send my 2006 Return as proof? HR Block gave me bunch of documents after tax file return submission, which is the doc I have to send along with W7? What is the process after getting ITIN NO? Do I need to put the amendment to get federal return & State returns?

3. I saw 183 days limit, does my wife eligible (as she came here on Sep 1, 2006) for ITIN No?

3. Which checkbox I have to tick among 'a' to 'h' in W7 (Please consider our arrival dates above for this option if required)

Guys, please let me know your responses. Appreciate your help

Thanks.

[AtlantaTaxExpert]

1 & 2) You have a choice. You can file jointly as resident aliens, with a Form W-7 to get your wife an ITIN. The best support document to prove the identity of your wife is a notarized photocopy of your wife's passport. Based on what you have stated, this is your best option. However, under this option, your world-wide income earned in 2006 is subject to U.S. taxes.

You can file a dual-status return. You would have to report your home-country-bsed income, but NOT pay taxes on it. You can claim your wife as a dependent (so you would still need the ITIN), but you LOSE the $10,300 double standard deduction you get by filing jointly as resident aliens.

3) The 183-day Substantial Presence Test does NOT apply to your wife if she is a non-resident alien opting to be treated as a resident alien for the whole year.

4) Check box "e".

If you want a tax pro who knows how to file returns for foreign nationals, you can contact me at [email protected].

[harimp]

Thanks Atlanta tax expert for the quick response.

After going through your response I understand that I have a choice here, option 1 is "Married filing Jointly" after getting my wife's ITIN No and option 2 is dual status return. Is it correct?

If yes, what is the best legal option (with max refund) for me? Option 1 or option 2?

* Do I need to send my 2006 tax returns as well with W-7 form? What should I do after receiving ITIN, do I need to amend Federal and state tax returns?

Thanks for your help.

[AtlantaTaxExpert]

That is correct.

Choice #1 is filing jointly with your wife as resident aliens and reporting ALL your world-wide income, with the first $16,900 of said income being tax-free.

Choice #2 is filing a dual-status return, claiming your wife as a dependent, reporting your home-country income (but NOT paying taxes on it), but losing the $10,300 standard deduction and being able to claim only $6,600 in personal exemptions.

In either case, you must complete Form W-7 and submit it with the tax return to get your wife an ITIN.

Which is better? I cannot answer that without knowing what you made in the U.S. and what you made in your home country.

The IRS would insert the ITIN after issuing it and process either return. They would send you the ITIN, and then you could file your state tax return.

[harimp]

Thanks again for your help.

As I already filed 2006 returns, I think I have to amend my returns, If yes, do I need to amend 2006 return with 1040x form?

I have gone through 1040x form, where should I disclose my income and my wife's income? I didn't see any such column to fill worldwide income in 1040x form.

Do I need Form-16 (India Income Statement)original to show my worldwide income?

Thanks for your help.

[AtlantaTaxExpert]

Yes, use Form 1040X to amend any return, including the 2006 return.

The world-wide income added to the figure on Line 1 (Asjusted Gross Income) of Form 1040X.

A copy of Form 16 is sufficient; the original is not necessary.

You may want to consider getting professional tax help!

[harimp]

Hi Atlantatax expert,

I was going through some of the tax topics in this forum related to my scenario, in one of the topics you replied to one of the queries "Wife needs to pass substantial presence test (183 days) in order to file jointly"

Do I need to wait until my wife's presence reaches 183 days in order to file jointly even if I declare our india income for tax purpose?

She reached US during first week of Sept, 2006.

Please let me know.

[AtlantaTaxExpert]

Harimp:

If I said that about the wife needing to pass the SPT, I was wrong.

Your wife will be filing as the non-resident alien wife of a resident alien who BOTH choose to be treated as resident aliens for the whole year of 2006.