[sendhil_chinnasamy]

Hello,

I have been on H1B visa since July 2003. I am currently residing in New Jersey for the past 2 years. I got married in May and my wife accompanied me to US on 05/22/2006. She is on a H4 Visa and has been living with me since then. She does not have a SSN/ITIN/TIN.

To file my taxes:

What filing status should I use - single/married filing jointly/married filing separately?

Thanks in advance,
Sendhil

[BritBoyInUSA]

I was in exactly the same situation during 2005 and filed 'Separately' (obviously my wife did not file at all), and I claimed her exemption as she had no income in the USA. All I needed was an ITIN number for her, which was easy to obtain from the IRS. In fact, they processed my return automatically after the ITIN was issued.

[v_atray]

Fill out form W-7 to apply for your wife's ITIN. If I remember correctly, you have to provide two forms of photo identifictation (passport, driving licence or state ID will do). You will also file your 1040 along with for W-7 and mail it to the ADDRESS IN W-7.

File as married filing jointly and take appropriate deductions. IRS will assign an ITIN to your wife, process your return and credit the refund to your account. The whole process takes 6 weeks or so.

[AtlantaTaxExpert]

Okay, gang, one at a time:

Sendhi:

V Atray's advice is good. However, the best document to provide with the W-7 is a notarized photocopy of your wife's passport. If you provide that, no other document is not needed. You can get the photocopy notarized at any bank.

When you file, file Married Filing Jointly, as that allows you to claim both your wife's personal exemption of $3,300 AND her standard deduction of $5,150 in addition to your own personal exemption and standard deduction. This will the effect of making the first $16,900 of your combined income tax-free.

BritBoyinUSA:

If, in 2005, you filed Married Filing Separately as a resident alien and claimed your wife as a dependent, then you filed incorrectly. Resident aliens and U.S. citizens cannot claim their spouses as dependents. They can (and should) file jointly to get the maximum benefits of two personal exemptions (for $3,200 each for 2005) and a double standard deduction of $10,000 for 2005.

If this is the case, you should amend your 2005 tax return to fix the error AND to allow you to claim an additional $5,000 standard deduction by filing Married Filing Jointly.

If you were a non-resident alien, you may or may have been able to claim your wife as a dependent. It depends on what the U.K.-U.S. Tax Treaty says.

If either of you need help filing or amending your returns, contact me at [email protected].

[BritBoyInUSA]

Thanks for the advice.

I didn't claim my wife as a dependent, I just claimed her exemption.

For 2006, my wife has zero income in the USA, but does have tax paid income in the UK. I just have my income in the USA.

Also, as my wife is an H4 visa holder, she is not able to obtain a SS number. Does this not remove the possibility of filing jointly ?

Under these circumstances, for my 2006 filing, do you still recommend filing jointly, and if so, why/how ?

Thanks for your help, Steve.

(Sorry for hijacking this thread) :(

[sendhil_chinnasamy]

Thanks for all of your responses. I will do the needful now.

Sendhil

[AtlantaTaxExpert]

Steve:

You just cannot claim the exemption without identifying source of the exemption, in this case your wife. As for not having or being able to get a SSN, your wife can get an Individual Tax Identification Number (ITIN) by completing a Form W-7 and submit it, along with a notarized copy of her passport.

Again, you need to first amend your 2005 tax return to correct your error. You will send in the W-7 paperwork noted above with the amendment to the address in the W-7 instructions. The iRS will review the application, issue the ITIN, insert it in the appropriate spot on the tax return amendment, process the amendment and (presumably) send out your refund check. They will also send her the ITIN under separate correspondence.

When you get the ITIN, you can then file jointly on your 2006 returns (both federal and state, if the state has an income tax). After that is done, you can then amend the 2005 state return, which will also probably result in a refund of some type.

If this seems to be too much of a problem, contact me at [email protected] and let me help you. You will find my fees to be very reasonable.

[BritBoyInUSA]

Thanks David, She has an ITIN number, we used it on my filing last year.

I claimed the exemption as my wife, not as a dependent (I think there is a difference in 2005) ?

Will heed your advice and proceed as recommended.

Thanks for your help,

Steve.

[AtlantaTaxExpert]

Yes, there IS a difference.

If you filed Married FIling Separately and claimed your wife as a dependent in Section 6C (Dependents) of Form 1040A, you get her exemption of $3,200 but only a $5,000 standard deduction, plus claiming your wife as a dependent is NOT LEGAL.

If you file jointly, the standard deduction doubles to $10,000.

I call that a significant difference.

Now, did you file Married Filing Jointly or not? If not, amend the return. The IRS WILL get around to noticing the mistake and will send you an audit notice to fix it.

[BritBoyInUSA]

As I said, I did not claim my wife as a dependent.

I filed 'Married', 'Filing Separately'.

The only negative about this is that according to you I could have got more exemption by filing 'Married', 'Jointly'.

I can live without this.

Thanks, Steve.

[AtlantaTaxExpert]

It's your choice, but the amendment is relatively easy to file, and will add a $8,200 deduction to your 2005 tax return.

That means about a $820 refund if you are in the 10% tax bracket, or $1,230 if in the 15% tax bracket.

Think about it!