[frick93]

Okay, I need clarification about the Dual Status Filing
1. I have been a resident for Tax Purposes for the past 5 years and 2011 was my year of departure from the US. I have a wife and Child and I've filled married jointly with dependent in the past. My only Income Was while I was a resident, I have no US income as a non resident

1. According to Pub 519, I need to file a Dual Status and I can claim itemized deductions for the Income. How does that work in practice? For example, If I'm entitled to mortgage premiums and charitable contributions and I report it on 1040Sch A how do I show it on 1040NR schA since there is no space for Mortgage premiums?

2. Another confusing item-Publication 519 says I can't choose MFJ as Dual Status (also as a non resident) but then claim "subject to general qualifications, I can claim an exemption for spouse and dependent", how can I claim an exemption for a spouse if I can't choose MFJ?

3.Also reading through the answers to some questions, I have seen advice that says just file 1040 since there was no US income as a non resident.

Please advice

[AtlantaTaxExpert]

1) If you file dual-status, you would use the Schedule A that goes with Form 1040 to report all of your itemized deductions (to include the mortgage interest), then transfer the total itemized deduction from Line #29 of that Schedule A to Line #40 of Form 1040 AND Line #38 of Form 1040NR. The tax calculation occurs on Form 1040NR, since that is the controlling document due to your year-end status as a non-resident alien.

Note that the dual-status return MUST be mailed.

2) You claim BOTH your wife and child as dependents on Form 1040NR.

3) This highlights the fact that you have a CHOICE. If you use 31 December 2011 as the DEFAULT Residency Termination Date (regardless of when you actually left), you can then file as a resident one last time, filing jointly with your wife and claiming your child as a dependent. If your income is not too high, this also allows you to claim the $1,000 Child Tax Credit, something you are specifically NOT allowed to do if you file dual-status. Further, this residency return can be filed electronically.

In either case (dual-status or resident return), you need to submit a Residency Termination Statement, which will have to be mailed separately if the resident return is filed electronically. You have until 30 June 2012 to mail this statement.

I suspect that if you model the return BOTH ways, you will find that filing as a resident one last time will be the BEST course of action tax-wise.

Your questions gives great support to a statement that I periodically post on this forum: The dual-status return is NOT for amateurs! Get professional help from someone with experience filing this type of return.

If you want my professional help, double-click on my title above and scroll down to my profile/signature. You will find my email address and websites there.

[frick93]

Thanks ATE. I was hoping you would answer this question.

Actually this dual status return is something else, I called the IRS for help on how to fill out the schedule A and they will get back to me in 15days :D

The Residency Termination Statement, is this just a letter or is there a specific form to fill out?

Also, is there documentation/publications I can reference about choosing to file as a resident instead of a Nonresident in case (God forbid) I get audited?

Thank you again

[AtlantaTaxExpert]

The Residency Termination Statement is just a formatted letter which you sign and mail.

The provision about claiming 31 December 2011 as the default termination date is covered in IRS Pub 519.