[vipingupt]

Hi -

I am on H1B visa working in USA for last 6 years and am planning to relocate to india over the summer (May-June 2010) and I have few questions around the tax implications I would have from my relocation:

Facts:
1. I have 3 dependents (Wife is India citizen and has no income, 2 children (4 and 1) who are US citizens)
2. my estimated income till June 2010 is around $50,000
3. my estimated income from my india salary for the later part of the year will be $20,000
4. My company is going to pay $30,000 in relocation asistance.

Questions:
1. if I relocate only after spending more than 183 days in 2010 in USA, will that make me eligible to file 1040 claiming all the standard deductions, exemption and child tax credit? I believe this option will result in bigger tax return. Is that right?
2. also, under 1040, will I be able to claim foreign tax credit for my india income?
3. otherwise if I have to file dual tax, what exemptions/deductions/credits can I claim based on the fact that I am from India?
4. will # of days of my stay in US in 2010 have any impact on my tax return?

Thanks,
Vipin

[MukatA]

If you complete SPT in 2010, you can file joint return as residents. You must both report worldwide income for 2010. If you paid taxes in the foreign country, you will claim credit for taxes paid in the foreign country by filing Form 1116 or can file form 2555 Foreign Earned Income Exclusion.
Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income

[vipingupt]

MukatA - Appreciate your quick response. Thank you!!