[ashokjp]

Hi,
I have recently come to US from India in Oct2007,and working as software professional.
My wife and child is in india.It is time that I have to file tax retutns to the Fed.
1)How to file taxes here.
2)How can I get tax-ids for my spouse and child who is in india,so that I can get tax exemptions in my income.
3)My wife is a CentralGoverment Employee in india.
Guide me as I am a newcomer.
Thanks
Ashok

[AtlantaTaxExpert]

Ashok:

You will be able to file jontly with your wife, but by doing so, she MUST declare her India-based income as subject to U.S. taxes. The Foreign Tax Credit (Form 1116) can be used to get a credit for the Indian income taxes paid on her slaary.

You will also be able to claim your child as a dependent under guidance received from the IRS International Tax Hotline last year. The act of you and your wife CHOOSING to be treated as resident aliens is inferred onto your child as well.

You will have to file Form W-7 and apply for an ITIN for both your wife and child, plus you must wait until you have met the Substantial Presence Test in 2008 before you can file. That means you cannot file until some time in June 2008, so you must BE in the United State in June 2008 in order to file jointly with your wife.

Contact me at the email address below if you need professional help.

[MukatA]

I am not sure that Ashok can file 2007 return jointly and treat his wife as resident alien for the whole year. He can do this only starting with 2008.
Also Ashok is nonresident alien for 2007 or Dual Status Alien (resident from the date he came to the U.S. that is Oct 07) if waits till he meets Substantial Presence Test in 2008.

"If you are a U.S. resident for the calender year, but you were not a U.S. resident at any time during the preceding calender year, you are a U.S. resident only for the part of the calender year that begins with the residency starting date. You are a nonresident alien for the part of year before that date."

[AtlantaTaxExpert]

MukatA:

This is a niche of the tax business that both I and Texas Tax Expert serve on a routine basis. We have both prepared multiple returns under the First Year Choice Program, allowing foreign nationals to file as resident aliens who have NOT been under a work visa (H-1/H-1B/L-1) for the entire year or entered the U.S. after 1 January 2007 IF:

- They are married.
- The married couple BOTH choose to be treated as resident aliens for the entire year, making ALL of their world-wide income subject to U.S. taxes.
- They are in the U.S. for at least 31 consecutive days.
- They remain in the U.S. the following year long enough to qualify for the Substantial Presence Test BEFORE they file the tax return. That is the reason they must watt until as late as July 2008 before they can file their 2007 tax return.

[MukatA]

Thanks,
Ashok must file joint return to be treated as resident for the entire year.

Also, about claiming exemption for children, this is from IRS Publication 17: Your Individual Income Tax, p.26, co.2 - Child's Place of Residence:
Children usually are citizens or residents of the country of their parents.

(So if the parents are residents, the children are residents).

[AtlantaTaxExpert]

Noted!