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    graahak1's Avatar
    graahak1 Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Feb 8, 2009, 06:46 AM
    How to disclose foreign income and tax paid on that
    Hi,

    I started working in the US on an H1 from July 31 2008. My wife joined me on an H4 on September 5 2008. After reading a number of previous posts I've reached the conclusion that I will not satisfy SPT requirements for 2008, but I should be able to wait to satisfy those requirements in 2009 and then file my 2008 returns after that. I'll file jointly as a resident alien for which I'll get a $10900 exemption. But I also gathered from previous posts that both my wife and I will have to disclose the income we earned back in India for this. Is there a separate form that I'll have to submit for this disclosure? Besides, we've paid taxes on this income in India already. So how do I indicate that and to what extent will we be able to escape double taxation? Moreover, the financial year in India is from April to March, so if I need to submit returns filed in India as proof of having paid taxes there, will I have to submit 2 sets of proofs - one for the period Jan to March 2008 and one for March to Jul 2008?

    My other question was about an ITIN for my wife. The instructions in the form on the IRS website state that I need to submit the return for which an ITIN is being requested along with the ITIN application. But this seems sort of chicken and egg to me because I cannot file a return without the ITIN for which I need the return.. Please advise.

    Thanks in advance.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Feb 8, 2009, 08:07 AM

    You will show India income from Jan 1, 2008 to Dec 31, 2008 on the tax return. You will claim credit for taxes paid in the foreign country by filing Form 1116 or can file form 2555 Foreign Earned Income Exclusion.. Read: Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income

    You will attach W7 with your tax return.
    You should get professional help. Contact AtlantaTaxExpert at [email protected]
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