[sreeja_19]

Hello Tax experts,

I have been on H1 for more than 2 years now and all of last year (2006). I got married in Dec 2006 and my husband joined me on H4 (on Jan 29 2007).
My questions are the following:

1. Should I be mentioning him as a dependant when I file my tax returns for 2006?
2. If yes, how should I go ahead and do that?
3. He does not have a SSN and cannot have one on H4, so is there anything I can do?
4. In 2006, I gave my old car to charity. The said that I can get some tax benefits. Is that true?

Thanks,
Sreeja

[AtlantaTaxExpert]

Sreeja:

1-3) Since he is your non-resident alien spouse, you CAN claim him as a dependent if you want. You can also file jointly with him under the option of a non-resident alien spouse (him) filing jointly with the resident alien spouse (you). However, in doing so, you make HIS income from your home country subject to U.S. taxes. It MAY be more beneficial just to claim him as a dependent. In either case, he needs to complete a Form W-7 and submit it, along with a notarized photocopy of his passport, to be issued an Individual Tax Identification Number (ITIN).

4) You can only deduct that donation if you itemize, which is not likely unless you live in a high-tax state (NY, California, Massachusetts) OR you own a home on which you are paying a mortgage.

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

[sreeja_19]

Hello Sir,

Thank you so much for your response. It really helps me a lot. I think I will be filing my spouse as a dependent.

My Questions are:
Which 1040 form do I use for federal filing?
What kind of deductions can I claim, for federal and state?

I live in MA and am planning on taking the federal tax return directly to the Boston IRS along with the W7 for an ITIN. I checked online to make sure they have the ITIN service.

As you had mentioned, I can deduct the donation (as I am a resident of MA) and can claim as much as $500 if I itemize. I am going to do that.

Thanks in advance for all your help,
Sreeja

[AtlantaTaxExpert]

Form 1040 if you are going to itemize. Check out Schedule A for the possible deductions.

[sreeja_19]

Hello ATE,

I still have a bit of confusion about the filings. I was reading other emails about dependant/ spouse filings and also looked at form 1040.


[1]Since my husband was not physically present in the country in 2006 and if I file jointly, his income outside US becomes taxable. So, I decided to file him as a dependent. However, I looked at form 1040 and was a bit confused as to where to correctly mention him as a dependent.

[2]Should I not mention him at all in the spouse's name section on the top most section of the form and only mention him in the dependent section?

[3]My spouse was employed in 2006 for only 4 months (outside the US). Do you think it will be more beneficially to file with him jointly rather than as a dependent?


Please advise,

Thanks,
Sreeja

[AtlantaTaxExpert]

1 & 2) To claim him as a dependent, he MUST be physically in the U.S. My mistake in not making that clear. Thus, you cannot claim him as a dependent. Your only option is to file jointly or file Single (permitted because you and he were separated for all of 2006).

3) Depends on how much he made. Filing jointly with him gives you an additional $8,450 in deductions. If his income for 2006 was LESS than that, then it is a simple decision: File jointly. If not, then you have factor in what he paid in foreign income taxes to decide if filing jointly make sense.

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

[sreeja_19]

Hello ATE,

Thanks for all the help. Your advice has really helped me clear a lot of confusions. I will be filing jointly with my husband. His total earnings for 2006 have been only around $2000. However, I have a bit of doubt about the documents to prove his earnings.

1. He was working in Botswana before our marriage in 2006 Dec. He did pay tax in that country, however he is not claiming the returns. He also does not his pay slips right now, but he know how much he earned.
Do we need to attach something as proof? Is it common for IRS to reject the returns because my spouse earnings were outside US and there is no W2 to prove it?

2. Again, should I be using form 1040EZ for married filing jointly. Or any other 1040 form? And will I get the standard and itemized deductions for filing jointly?

Your advice is much appreciated.
Thanks,
Sreeja

[AtlantaTaxExpert]

You can claim the $2000 on Line #12 (Other Income).

Call it "Foreign Income earned in Botswana".

[sreeja_19]

Hello ATE,

Just a bit of confusion after looking at all the 1040 forms. Let me summarize my situation here again.
1. Married filing jointly. (I am on H1 and spouse on H4).
2. Spouse has income from Botswana (which as you suggested, add line # 12). Which form though? I did find only one place in 1040A - Business Income. Is that where I add it?
3. I am just claiming standard deduction. I do not have much to itemize.
4. I am planning to fill the W7 for my spouse and take it with the federal form to the IRS office. Will they give me the ITIN for my spouse right away? Do you think passport will be enough if we directly take the form to IRS?

Again, which form do I use? 1040, 1040A or 1040EZ (no place there to declare my spouse's income)

Your responses will help be get past the last bit of hurdle here.
Thanks again,
Sreeja

[AtlantaTaxExpert]

Sreeja:

You cannot use Form 1040A; you must use Form 1040. Claim the Botswana income on Line #12, Form 1040.

The local IRS office MAY give you your husband's ITIN, but they also may expect you to file your joint tax return at the same time, so you need to have it prepared, sent to your husband for signature (via email if possible), then mailed back to you (because his signature MUST be an original signature) BEFORE you go to get the ITIN.

Call the local IRS office to see if they will issue the ITIN without filing the tax return.