[Manish08]

Hi,

I am an Indian working on H1B in the states. I came to US in 2006 and completed my masters in 2008. I have been working on OPT since June and got my H1B stamped on Dec 22. Also, I got married in July this year and my wife is on F1 here with stipend. My queries are:

1. Would I be paying social sequrity and medicare for Oct, Nov and Dec (my H1B was approved from oct 1) and would I be treated as resident or non-resident (given my Visa was stamped in Dec only)?

2. Can my wife and I file joinly? How would it impact her status? What is the best way for us to go about it?

Any help in this regard would be appreciated.

Thanks,
Manish

[AtlantaTaxExpert]

It is irrelevent when you got the visa stamped. It was effective 1 October 2008, so that is the date that the Social Security and Medicare tax withholding should have started. If it was not started, you have the legal obligation to so notify your employer of this fact. Do that in writing, then let the employer fix the problem.

You can file jointly with your wife and you both CHOSE to be treated as resident aliens. This will allow you to claim the $10,900 joint standard deduction plus two $3,500 personal exemption (for yourself and your wife).

The downside is that:

• you must WAIT to meet the Substantial Test before you can file, which means you must wait until 1 June 2009.\

• you must declare ALL 2008 world-wide income, but you can at least partially offset any double taxation by claiming a Foreign Tax Credit (Form 1116). Because you were in the U.S. for all of 2008, this may not apply in your case.

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

[Manish08]

Well - thanks a lot but it get even more complex now.

1. Can I not file as a NR for year 2008 and not worry about it (just a simple yes/no would do)

2. Lets say I file as resident in 2009, would I be eligible for education credits for the fees I paid in 2008?

3. I am still confused on CP versus COS H1B - does it makes no difference to your social security and medicare?

4. Finally, are you based out of Atlanta?

Manish

[AtlantaTaxExpert]

Manish:

1) Yes, if that is what you want to do, but WHY? Filing jointly as resident aliens makes MUCH more sense tax-wise.

2) No; you must claim the credits on your 2008 return for the tuition paid in 2008, and you can only do that if you file as a resident alien in 2008.

3) No, it makes NO difference for your wife's FICA tax liability; see link below:

Nonresident Spouse Treated as a Resident

4) Yes.