[suniluic]

Hello Experts -

I am on an H1B visa and my wife converted from H4 to F1 in Fall 2007. She has a 25% assistantship and hence is earning a little bit.

This is a new situation for me. How do I file my taxes married/separately also resident/non-resident.

Thanks
Sunil

[AtlantaTaxExpert]

Sunil:

If you have already filed jointly with your wife for 2006, she will be considered a resident alien unless she expressly REVOKES that status.

As to whether you should file jointly or separately, it depends on how much she makes, whether she will be working on OPT/CPT at a future date (if she remains a resident alien, she WILL have to pay FICA taxes), and whether you want to claim the Education Credit (this credit CANNOT be claim by you if you file separately).

[MukatA]

Does she has a choice to revoke or file for termination of the residency?

[suniluic]

Thanks for answering the question. How much education credit can I claim? What form does this go to?

[suniluic]

Also, she made only a small amount $3500 in the year. Does it make sense to file separately then?

She may be working on OPT in the future.

[AtlantaTaxExpert]

If she only made $3,500, then revoking her residency status and reverting BACK to a non-resident status makes sense in that it may save several thousand in FICA taxes when she is on OPT.

The only thing you lose is the $5,350 Standard Deduction. Her personal exemption should cover any tax liability on her income.

[suniluic]

How do you revoke your residency status?

[AtlantaTaxExpert]

See IRS Pub 519. The revocation procedure is covered in the pub.

Download as a PDF file from Internal Revenue Service, then search for the word "revocation".