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shoco · Jan 17, 2008, 09:15 AM

Hi,

We moved recently to the US (mid October) from Australia. We are here on a L1 Business visa and work for an US company. Is it correct that we have to file our tax as non-immigrant? My husband is sole income earner, can I be claimed as dependent on his tax return file? Can we claim any of our moving costs?

We are completely new to the tax system, so any advise is appreciated.

Thanks.

AtlantaTaxExpert · Jan 17, 2008, 09:22 AM

Shoco:

We need to know what your home country is?

You may owe ZERO taxes for 2007.

It all depends on the tax treaty (if one exists).

shoco · Jan 17, 2008, 01:17 PM

Hi,

Our home country is Australia and my husband is working for an US company.

Thanks.

Originally Posted by AtlantaTaxExpert

Shoco:

We need to know what your home country is?

You may owe ZERO taxes for 2007.

It all depends on the tax treaty (if one exists).

AtlantaTaxExpert · Jan 17, 2008, 01:36 PM

Shoco:

Glad you added the fact that he works for a U.S. company.

That fact makes his salary fully taxable by the U.S. according to the U.S.-Australia Tax Treaty.

You have several options:

1) You can file jointly with your husband and you BOTH choose to be treated as resident aliens. This will require that you wait until June 2008 before you can file (because you have not yet satisfied the Substantial Presence Test [SPT]), but it will afford you both TWO personal exemptions of $3,400 each and a double standard deduction of $10,700. However, it also makes ALL of BOTH of your 2007 world-wide incomes subject to U.S. taxes. That can be partially offset by the Foreign Tax Credit (Form 1116) for the Australian income taxes paid on your Australia-sourced income.

2) Your husband can file a dual-status return. This will allow him to claim you as a dependent, but he will NOT be able to claim ANY standard deduction. He will have to wait until June 2008 to file (just like option #1), but he will pay taxes ONLY on the income earned inside the U.S.

3) Your husband can file as a non-resident alien. This offers the advantage of being able to file IMMEDIATELY (no 5.5 month wait), but he can only claim himself. You CANNOT be claimed as a dependent.

In ALL THREE CASES, your husband can claim the costs of certain moving expenses incurred during the move from Australia to the U.S. if he paid them out-of-pocket and he did NOT receive tax-free reimbursement.