[dhirenraval]

Hello,

I arrived USA with-out family (on L-1A visa) on Aug-02-2009. My wife and two kids arrived on Oct-24-2009. My wife is Stay-home mom. I understand that I/We don't pass Substantial Presence Test (Only 152 days, counting from my arrival date) for 2009 therefore I'm treated as NRA for the financial year ending Dec-09. However, I'm going to be staying in USA for the entire 2010. Not planning to leave country also during rest of Year 2009 or 2010. My US tax withholding are automatically being deducted by my employer based on my NRA/Single US taxation status. Soon I'll receive W2 from my employer. Now, I'm very much interested in making First-Year-Choice as per the US taxation law however, I'm confused about how to initiate the actual process.

Here are my questions:-
1) I'm aware that I've to file an extension; but which 1040 form and what all details I need to attach along with my extension request? I would not like to mess-up things here.
2) My wife and first kids have ITIN from my previous trip back in Yr 2005 but second kid doesn't! Do I have to apply ITIN along with the extension request?
3) Can I file the actual Tax return of 2009 Married/Jointly return sometime after May-15-2010 using online tools like Taxact / TurboTax etc?

Would greatly appreciate if someone can please solve my query.

Thanks in advance!

[AtlantaTaxExpert]

1) More than likely, you will file Form 1040A.

2) You will submit Form W-7 with the Form 1040A, along with a notarized photocopy of your child's passport. The notarization can be done at your local bank (unless you live in California, in which case you need to get it done at the local IRS office).

3) You can prepare the return using TurboTax, but you must print it out, sign it, have your wife sign it, and MAIL it with the signed Form W-7 to the address in Austin, Texas that can be found in the W-7 instructions.

If you want professional help doing this, contact me at [email protected].

[dhirenraval]

Tax Expert,

I really appreciate your prompt response on my query, I arrived from India and currently based at Florida which I forgot to mention earlier. I'm pretty confident that I can do this on my own yet will definitely consider contacting you if I feel to seek professional help on this one. Can you please further answer these two questions?

1) If you suggest that I need to attach 1040A along with my extension request. Do I need to do fill it up based on my NRA/Single taxation status (including only personal exemption of $3650) or Married Filling Jointly along with Standard Deductions and Personal Exemptions for all my dependents? To be more specific, can I incorporate standard deduction of $11,400 and Personal Exemption (Single= $3650 and if Married w/ dependents = $14,600) while filling 1040A during extension request?

2) Do I need to attach my Indian Payslip for Jul-2009 or any other equivalent forms along with extension request proving that I was paying my taxes in India prior to my arrival in USA?

3) Do I need to attach notorized W7 for my kid while filling the extension request or during the actual Return filling process after May-15th?

Thanks in Advance.

[AtlantaTaxExpert]

1) Just file the extension (Form 4868). Do an initial cut of your return to determine if you OWE taxes or are due a refund.

If a refund is due, file JUSt the Form 4868.

If you OWE taxes, send a check with the extension request.

2) No payslip is required; the IRS will have on file a copy of your W-2 which shows you are paying the required taxes.

3) No; the Form W-7 is submitted with the tax return in May.

[dhirenraval]

Thank you so much for your kind advice! Based on my primary assessment so far, I'm expecting at least $1000 refund, even with my NRA/Single status! My employer always deducts more taxes assuming we get fair amount back in return.

From you responses, I feel that I can even file an online extension, if there are practically no attachments necessary during that time! Am I right?

[AtlantaTaxExpert]

Yes, an on-line extension is fine.

[dhirenraval]

Once again, I would like to humbly thank you on your kind advice and prompt responses. I know I'm getting way ahead of myself here, on this matter at this point but this is how I would like to summarize and conclude this post, and please correct me if there is any error in my anticipation. I've derived this after taking your advice and reading Publication 519 + Forms 1040/1040NR-EZ/4868 (instructions) for multiple times.

1) I'll file an Online Extension before 04/15/2010. In which I'll provide details as below mentioned:-

a. My US residential address,
b. My SSN
c. Spouse SSN :- I'll leave it blank (Although my wife has an ITIN and eligible for SSN which I'm planning to apply soon!)
d. Estimated Tax liability:- Derived after using 1040NR-EZ (No Standard Deduction, No Dependents but only PE of $3650 for myself)
e. Total Tax payments :- I'll fetch from my W2
f. Balance due :- This will come in minus as I believe I've already paid more.
g. Amount I'm Paying :- Zero
h. Check if Out of Country:- I'm not checking this one as I'll be in USA.
i. Check if you file 1040NR/EZ :- I'm confused about this one but I'm not going to check it.

2) After 05/15/2010, when I've passed SPT for 2010, I'm going to manually file my actual 2009 Return in which I'll include

a. 1040A - (Married filing Jointly) Taxes derived as per the Federal Tax brackets (table) after deducting (SD=$11,400 + PE=$14,600 + Chid TC=$2000)
b. Notarized W7 + Passport copy of my second Kid for his ITIN
c. Statement for First Year Choice including:-

1. My Name and Address
2. I'm making First Year Choice
3. I was not resident in 2008
4. I was resident under SPT in 2010
5. Number of days present in USA in 2010
6. The date of my arrival and continuous presence in 2009

Please advice/correct me, if I'm missing something. I'm an amateur, and would not like to mess it up!

3) Now, if I make this choice, do I need to end it formally next year by intimating IRS?

4) Since I'm making this choice, does that mean I can not make such choice ever in future for the lifetime? Assuming I leave the country in 2011 and return back with similar scenarios after few years, lets assume in August-2015? Who knows if world still exist, after the devastation showed in 2012 movie! :)

Thank You,
Dhiren

[AtlantaTaxExpert]

Dhiren:

1) If you file an extension under BOTH you and your wife's name, you MUST mail it, because an on-line extension requires SSN/ITIN for BOTH filers, and that is something you will NOT have. On the mailed copy, you pur "APPLIED FOR" where your spouse's SSN would go.

2) Your First Year Choice statement is for the dual-status return. For a joint return, put BOTH names and SSNs (for your wife, put ITIN: APPLIED FOR), your current address, and state: "We hereby certify that we meet all requirements to be considered resident aliens for all of 2009 and do hereby choose to be treated as resident aliens for 2009". You BOTH need to sign the statement.

3) No need to formally end the resident status.

4) Your resident alien status continues until 31 December of the year you depart. You will need to notify the IRS at that last year's return that have departed the U.S. After that notification, no further tax returns will be required.

[dhirenraval]

While filling an online extension, I'll calculate my tax liabilities using 1040NR-EZ (assuming NRA/Single status) therefore I'm not planning to put my Spouse's ITIN/SSN details in there. I hope I'm doing this right thing there! Although, she already posses an ITIN and I'm planning to apply her SSN soon as she is eligible for that.

Please let me know, if it is mandatory to put my wife's ITIN/SSN during filling extension, if I'm planning to file the actual return with Married-Filling jointly status.

Thanks.

[AtlantaTaxExpert]

You are going to eventually be filing jointly, so the extension needs to be filed under BOTH names. The tax software will NOT let you file the extension electronically without your spourse's ITIN.

Mail it (after making a photocopy); approval is automatic. If you want to have proof of the extension filing, mail it CERTIFIED MAIL RETURN RECEIPT.

[dhirenraval]

Tax Expert,
Since this is my third-trip to USA and originally I've been filling my previous returns in Year 2001, 2004 and 2005 as Resident Aliens. Can I really make First Year Choice this time for the Year 2009? I was absent from US starting from Dec-2005 until Aug-2009.

[AtlantaTaxExpert]

Yes, First Year choice is allowed.