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sanjeevindia · Jan 14, 2007, 12:33 PM

Hi Tax Experts,

I am married and entered into USA on April 2006. My wife joined me in June 2006. I want to file my Tax for the time I was in USA?
1. Do I need to file ITIN for my wife first? Or I can do it when I am filing for my Tax?
2. Do I have to file as dual-status return for both of us? I don't want to get into all that "Foreign Tax Credit" stuff.

I read old replies from "AtlantaTaxExpert" and as per those.. I am a dual-status alien (as I came in April) and my wife who joined me on 30th June 06 has at least 183 days of US residency so she qualify for "substantial presence test" I believe.

Please suggest, I need to file it in Jan only as I want to get my parents here and I want the paper work to be done ASAP.

Thanks and regards,
Sanjeev

AtlantaTaxExpert · Jan 14, 2007, 03:12 PM

Sanjeev:

1) You will fill out Form W-7, have your wife sign it, and submit it with your 2006 tax return, mailing it (along with a notarized photocopy of your wife's passport) to the address in the W-7 instructions.

2) If you file dual-status, you claim your wife as a dependent, rather than filing jointly. You lose the double standard deduction of $10,300, but will be able to claim personal exemptions of $6,600 ($3,300 times two). It is true you meet the Substantial Presence Test, but that, by itself, does not qualify you for resident alient status.

However, because you are married, you are eligible to file as resident aliens with your wife. The drawback is you must claim your 2006 worldwide income, which means your income in home country (assume it is India) is also subject to U.S. taxes. You can get a credit for taxes paid to India on that 2006 salary (Foreign Tax Credit). That credit, plus the $10,300 standard deduction, may make filing as a resident alien the BEST way to file.

If you need professional tax help, contact me at [email protected].

sanjeevindia · Jan 14, 2007, 04:55 PM

Hi "AtlantaTaxExpert",

Thanks for the reply and suggestion. I have few more questions.

What documents would I need to claim my 2006 income in India?
Typically we get a Form-16 which is more like a w-2 and I do have the copy of the Indian Tax return filed. But my doubt here is: In India financial cycle is from April to March and I have filed taxes in India till March 2006 only, but I do have Form-16 for the month of April too.
Do I have to give proof of tax return of that too? Or only Form-16 is sufficient?
I can't submit original Form-16, so do I have to attach photo copies? Should it be notarized?

Please suggest.

Thanks and regards,
Sanjeev

AtlantaTaxExpert · Jan 14, 2007, 05:23 PM

Sanjeev:

You can attach a photocopy of your latest Indian tax return and a photocopy of the Form 16, but it is not required. You just need it to proof income and taxes paid if the IRS challenges your figures.

As noted, photocopies are adequate, and they do NOT have to be notarized.

You would prorate your income from 1 Jan to the date you entered the U.S. a simple arithmetic calculation.