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    knk_018's Avatar
    knk_018 Posts: 3, Reputation: 1
    New Member
     
    #1

    Jan 29, 2013, 08:10 PM
    Filiing status question
    Hello,

    I am a new entry to this group and would like to put forward my query on filiing the returns. Hope I would get some satisfactory answer based on all your expertize ! :)

    I came to US on 21st July 2012 on H1B visa and have been staying in CA since then. I am married and have a daughter who is 9 months old and they are on H4. My wife and daughter joined me in CA on 20th Nov 2012 until which she was in India. Mainly my question is on what should be my filing status as I am married. My W2 form indicates that my taxable marital status is Single though I am married for sometime now. Also I got to know that the standard deduction that I can claim can be up to 11800 if I can file jointly rather than applying alone.
    Hence wanted inputs on what are the mandatory documents that I need to be ready with if I have to file jointly. Since she is in H4, she doesn't have a SSN, and I understand that I will have to get the ITIN for my wife and daughter. Also heard some complexities on getting the ITIN done as there have been some changes in IRS on the changed notary specifications. Please let me know what exaclty is the process to obtain this and if notarizing near SFO Indian consulate would suffice my requirement as I stay near SFO.
    Any other inputs to this would be greatly appreciated.

    Thanks,
    Karthik
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,815, Reputation: 846
    Senior Tax Expert
     
    #2

    Jan 29, 2013, 11:43 PM
    It is probably most advantageous for you to file jointly with your wife, filing Form 1040 with Form 1116 to claim the Foreign Tax Credit.  Form 1116 is required because you must claim ALL world-wide income earned in 2012, and the Form 1116 allows you to claim a credit for the income taxes paid to your home country.

    You will need to apply for Individual Tax Identification Numbers (ITINs) for your wife and child by submitting Form W-7, and that process has undergone some radical procedural changes this past year.  Instead of the simple notarization process, the IRS now requires that your home country certify the photocopy of your passport as a true copy.  This is due to rampant fraud in the ITIN submission process.  The notaries simply cannot tell the difference between a fake passport and the genuine passport.

    This certification can be done by the Indian (I assume you are from India) embassy in Washington, D.C. or at one of the consulates in San Francisco, Chicago, Houston or New York.  Assuming you do NOT want to drive there, you need to call the nearest consulate and arrange to have this process done via the mail.  This process, done via mail, can take up to three months to complete. My clients to date have had the best results by mail with the San Francisco consulate, getting the certified passport photocopies in less than 3 weeks.

    Also, the IRS recently announced the opening of Tax Assistance Centers through which you may be able to submit the tax return, Form W-7 and passport photocopies IN PERSON without having to get the photocopies certified by your home country consulate. The list of the TACs are at the link below:

    Taxpayer Assistance Center Locations Where In-Person Document Verification is Provided

    The alternative is to mail in the actual passports themselves, something most of my clients are reluctant to do.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
     
    #3

    Jan 30, 2013, 11:06 PM
    You have two choices.
    Choice 1: You did not complete SPT in 2012, you can file non-resident tax return. You can also deduct moving expenses for the family. Use Form 3903.

    Choice 2: You can file resident tax return as Married Filing Jointly.
    You must wait to file your tax return till you meet the Substantial Presence Test in 2012. You will get standard deduction of $11,900 and exemptions ($3,800 each) for both of you and your child.
    You must both declare your worldwide income for 2012. If you have any foreign income, and on that income you paid taxes in the foreign country, then you can claim foreign tax credit (Form 1116). Read: Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income
    knk_018's Avatar
    knk_018 Posts: 3, Reputation: 1
    New Member
     
    #4

    Jan 30, 2013, 11:36 PM
    Thanks all for the response. Relating to Mukut's response on option 2, this is not the first time I have travelled to US. I had been to US before in 2007 and returned back to India in 2009. In that case, do I still have to pass the SPT?
    If not, can I start filing my returns immediately?

    Thanks,
    Karthik
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
     
    #5

    Jan 31, 2013, 12:30 AM
    Yes, you must pass SPT for 2012 to file resident tax return without waiting. Count 1/6 of days in 2010 Plus 1/3 of days in 2011 plus days in 2012. Your U.S. Tax Return: Substantial Presence Test
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,815, Reputation: 846
    Senior Tax Expert
     
    #6

    Jan 31, 2013, 08:37 AM
    That is NOT quite accurate. If the OP filed as a resident in 2009 and failed to submit the Residency Termination Statement, the IRS will carry him as a resident alien for 2010 and 2011, so he can file immediately in 2012 with no waiting requirement.

    If he DID submit the Residency Termination Statement, or filed dual-status in 2009, then he has to wait to file his 2012 tax return.
    knk_018's Avatar
    knk_018 Posts: 3, Reputation: 1
    New Member
     
    #7

    Jan 31, 2013, 09:37 AM
    Thanks AtlantaTaxExpert/Mukat for the comment. One question though here is, why would one submit residency termination statement when I don't see any use in this scenario. Is it mandatory to submit or does it have any other tax implications? Since IRS will consider me as resident alien for 2010 and 2011, should I be aware of any other tax regualtions here?
    FYI - I didn't submit residency termination statement in 2009 while going back.

    Appreciate your inputs here.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,815, Reputation: 846
    Senior Tax Expert
     
    #8

    Jan 31, 2013, 10:41 AM
    Technically, you were suppose to file 2010 and 2011 tax returns, but they would most likely be paperwork exercises since you would claim the Foreign Earned Income Exclusion. Since your income is in India, the IRS has no paper trail, so they probably will not require the filing of these returns.

    The residency termination statement is required per IRS Pub 519, page 10 if you want to check it out.

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