[Salvadorrdz]

I'm from Mexico and I'm moving in October 1, 2011 to Atlanta, GA to work on a permanent position with a TN Visa. I'm married but my wife and two kids will not come with me until the next year. How should I state my Federal and State Filing Status (Single or Married), and what should I state on: # of Federal Allowances, Personal Allowances, Dependent/Additional Allowances?

[AtlantaTaxExpert]

The TN visa is considered a work visa, but you probably will NOT meet the Substantial Presence Test, so you have a choice.

You can file as a MARRIED non-resident alien, filing Form 1040NR. Because you are from Mexico, you CAN claim your wife and children as dependents. This allows you to claim ONLY the U.S. income earned from 1 October to 31 December 2011, with personal exemptions of about $15,000.

OR

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

To apply for an ITIN, you need to complete Form W-7 for your wife and children. You need to make a photocopy of their passports, then get the photocopies notarized. This can be done at your local bank in most states in the U.S.

The downside is that:

• You must wait until 1 June 2012 to meet the Substantial Presence Test before you can file for Tax Year 2010. We will file the extension (Form 4868) for you as part of our service at no additional charge.

• you must declare ALL 2011 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.

If you need professional help when it comes time to file, email me at [email protected].

[Salvadorrdz]

Thank you very much!
Yes, I know it is a kind of work visa, thus I will pay taxes. So then, I can claim as Married non-resident alien to claim my wife and children even if they will not be living with me in Atlanta, right?
Those $15,000 of personal exemptions you mentioned, is this amount a fixed annual exemption, or based on what you figure it out and how it will apply to my overall retention? As I will be have an allowance of basically 50% of my income that will be delivered to my wife and children in Mexico.

I think I meet the Substantial Presence Test by now, but I think we should discuss this second option and further on a direct conversation...

If you are at Atlanta, I would like to meet you at your office to discus in detail my case, and to hire your services if a reasonable fee is offered... please contact me at my email!

Thanks!

[AtlantaTaxExpert]

Yes. Mexicans and Canadians CAN claim wife and children as dependents on a non-resident return. The $15,000 is exemptions is based on FOUR personal exemptions.

I have responded to your email.