[udaygreddy]

Hi,
I am staying and working in US since April 2013 and I am holding H1B Visa. My wife joined me in July 2013 and she is also holding H1B and working here. My Son(infant less than 1 year of age) came here along with my wife using a depenedent H4 Visa (my dependent).

I want to apply for US tax returns for 2013. Please advise how much am I eligible and what is the process to apply. Please note that our Baby will return to india in July 9 th.

[AtlantaTaxExpert]

It is probably most advantageous for you to file jointly with your wife, filing Form 1040 with Form 1116 to claim the Foreign Tax Credit.  Form 1116 is required because you must claim ALL world-wide income earned in 2013, and the Form 1116 allows you to claim a credit for the income taxes paid to your home country. Note that you must WAIT until sometime in May 2014 before you can file this joint return.

Since you both have H-1B visas, you should both have Social Security Numbers (SSNs), but your child will need an ITIN. You will need to apply for an Individual Tax Identification Number (ITIN) for your wife by submitting Form W-7, and that process underwent some radical procedural changes in 2012.  Instead of the simple notarization process, the IRS now requires that your home country certify the photocopy of your passport as a true copy.  This is due to rampant fraud in the ITIN submission process.  The notaries simply cannot tell the difference between a fake passport and the genuine passport.

FIRST ALTERNATIVE:

For Indian clients, this certification can be done by the Indian embassy in Washington, D.C. or at one of the consulates in San Francisco, Chicago, Houston or New York.  Assuming you do NOT want to drive there, you need to call the nearest consulate and arrange to have this process done via the mail.  Since you usually must wait until June to file, you have time to get this done (the process, done via mail, can take up to three months to complete). My clients to date have had the best results by mail with the San Francisco consulate, getting the certified passport photocopies in less than 3 weeks.

SECOND ALTERNATIVE:

The IRS also have Tax Assistance Centers through which you may be able to have the passport verified as genuine, then submit the tax return and Form W-7 IN PERSON to be forwarded to the ITIN Processing Center in Austin, Texas for processing , without having to get the photocopies certified by your home country consulate.

You go to the TAC with your wife and/or children, her passport, the SIGNED Forms W-7, and the completed and SIGNED tax return.

The IRS official verifies the passports, asks a few questions, completes the certification paperwork, checks the Forms W-7 and tax return, then returns the passports with a receipt for the tax return and Forms W-7, which is sent to Austin, Texas for processing.

You leave the TAC with your wife and/or family, the passports and a receipt for the Forms W-7 and the tax return.

You would get the ITIN about six weeks after you left the TAC.

The tax returns are NOT processed at Austin, Texas, but rather forwarded to the regional IRS centers for processing, so the refund will come about one month AFTER you get the ITIN letters.

The list of the TACs are at the link below:

Taxpayer Assistance Center Locations Where In-Person Document Verification is Provided

The FINAL alternative is to mail in the actual passports themselves, something most of my clients are reluctant to do, because, if the IRS gets the passport, they hold it for about TWO months.

After you get the ITIN, you can then efile the state tax returns.