[ygq2008]

Dear Expert:
I was attracted by your prompt and experienced answer, so registered and try to drop several questions about my current confusions for 2007 tax, hope to get some response from you.
My status:
Aug.22 2005 come to US, Aug.22 2005-Feb. 27,2007, F-1
Feb.28-Oct.1,2007, OPT
Oct.1,2007-present H1B
My wife and boy came to US in Jan. 2006 as my dependents.
-Oct.1,2007, F2 and -present, H4.

My questions are:

1. Am I a dual status tax payer? Based on the definition of IRS, I need to file two forms,
1040 NR return with a 1040 as a statement, is this correct?
2. Can I get three exemptions for my situation? 3400$ for my personal exemption as a student and $3400x2 for my boy and wife during the resident period?
3. What is the first year choice? Why somebody with the same situation can file as a resident alien if file in coming April? Why the time in 2008 is also considered as the substantial presence days for tax year 2007?
4. What type of deductions I can take with my current situation? I am thinking the following deduction, are there any problem?
(1) USD5000 student scholarship deduction based on US-China tax treaty.
(2) itemlized deduction.
(3) dependent care expense
(4) child tax credit.
5. I am covered by my employer sponsored retirement plan (401K), and I have earn more money than the amount for IRA account. Based on the information from Bank, I am eligible to open an IRA account. But somebody said I can take fully tax deduction, somebody said I can't. So just want to get you opioion on this.

Thanks for help.

[AtlantaTaxExpert]

1-3) You are a non-resident alien. You CAN fiule dual-status, but filing jointly with your wife and you both CHOOSING to be treated as resident aliens make more sense tax-wise.

4) You can claim items 1,3, and 4. The itemized deductions will probably not exceed the $10,700 standard deduction.

5) Cannot answer, as I do not know how much you are earning.