[sanjaykg568]

I came from India to USA first time on L1 on Sept 2nd, 2007 along with my wife and son on L2 and my wife in not working.

I plan to work on the same visa status till April 30, 2008 after which I would be joining a school on the basis of change of status from L1 to F1 (my spouse and dependent visa would change to F2). I also expect that the change of approval will come by end June 2008. That means I may remain in USA for more that 183 days in 2008 before my F1 is approved.

Do I qualify for 1040 as resident by virtue of being resident in year 2008 or do I qualify for 1040NR.

If I qualify only for 1040NR as my stay remains less than 183 in 2007, I have specific question about filing 1040NR. Can I get exemption for my spouse and dependent as per lines 7(c) I n 1040NR for 2007 filing (based on USA-India tax treaty).


Thank you so much for helping.

[AtlantaTaxExpert]

Yes, you DO qualify to file as a resident alien in 2007 under First Year Choice.

You can file jointly with your wife and you both CHOSE to be treated as resident aliens. This will allow you to claim the $10,700 joint standard deduction plus two $3,400 personal exemption (for yourself and your wife) plus one $3,400 for your child PLUS the $1,000 Child Tax Credit.

The downside is that:

• you must WAIT to meet the Substantial Test before you can file, which means you must wait until 13 May 2008.
• you must declare ALL 2007 world-wide income. There are two offsets available, by either claiming a Foreign Tax Credit (Form 1116) or a Foreign Income Exclusion (Form 2555).

Even with the downside, this is probably the best way for you to file.