[ajjukins]

I'm an Indian citizen, married with two kids on an L1A visa in the US (California) since July '06. I'm being paid by the US company I'm employed with since July '06. I've been in the States for less than 180 days in 2006, and will file my 2006 tax returns for Indian income in India. In 2006, I have more than $250K in US related wages for the period July-Dec 2006, plus some dividends and bank interest. My spouse does not work and had no US income in 2006. I was not present for more than 183 days in the US in both 2004 and 2005.

Please could someone confirm the following:
1) I can file the 1040NR
2) I can only claim a single exemption - for myself - in this form
3) I do have investment income in India that I do not need to declare in the 1040NR

Also, is it still beneficial for me to file the 1040NR, or should I file the 1040 as a resident jointly with my spouse and claim four exemptions?

Thanks!

[AtlantaTaxExpert]

1) If you were in the U.S for LESS than 183 for 2006, then you did NOT meet the Substantial Presence Test and can therefore efile as a non-resident alien, filing Form 1040NR

2) Yes, you can claim ONLY your own personal exemption.

3) You need NOT claim ANY India-sourced income, be it investment income or earned income.

I suspect that, given your income levels, that filing as a non-resident alien is the best option for you. However, the only way to know for sure is to prepare the return BOTH ways and compare the results.