Hi there,

I would really appreciate if someone can help with our situation here, and let us know how to amend our return.

For all of 2009, I have been a student here on F-1 visa. Me and my wife got married on Nov 22, 2009. She moved to US with H-1B visa on Nov 29, 2009. I was outside of US for 49 days in the whole of 2009 (traveled twice to home country), and my wife did not leave US in 2009.

I had filed 1040NR-EZ and 8843 for years 2007 and 2008. For 2009, never realizing the mistake, me and my wife filed taxes on 1040EZ through Turbotax under "Married filing jointly" status. In the return I had claimed credits for tuition paid (reported through 1098-T from my school). We also got "Making Work Pay" credit, about $800 (not exact).

Since my wife received wages for only one month in 2009, our combined wages was low, as a result we got a substantial return from both Federal and State (CA). But now, I feel the refund may not be as much, and we may owe the government all the money we got.

Questions bothering me are -
1. How to amend this return? What forms do I need to file?
2. What status should we claim? File "married, jointly" or file "married, separately" ? (I believe there are substantial savings in tax if filed jointly, but I am not sure if I can claim that jointly status).
3. Can I still claim what is reported on my 1098-T ?
4. Will there be any penalties for claiming "Making Work Pay" credit?
5. Will I owe interest on that money I may have to refund to the govt?

Also, please let me know if there's something else I need to keep in mind while filing the amendment.

Also, a quick question about 2010 returns.
I moved to H-1B status on Jan 4, 2010 and my wife has continued to be on H-1B this year. We both were outside of US for 30 days or less. Please let me know if we can file jointly this year.

I really appreciate any help in this matter.

Thanks a lot!!

Though you probably failed to wait the requisite amount of time to qualify for the Substantial Presence Test, you actually filed correctly, because you CAN file jointly as resident aliens and CHOOSE to be treated as resident aliens for all of 2009.

Now, you DID have to report ALL world-wide income on the 2009 return, so if you failed to do that, you will need to amend the return to add that extra income and probably claim the Foreign Tax Credit. You can also claim any education credit using the Form 1098-T that a U.S. citizen can claim.

If not, then you are good to go!

And, yes, you can file jointly for 2010 as well.

Thanks a lot AtlantaTaxExpert.

It is relief to know our 2009 return was not a complete wrong doing.

Yes, my wife was working in India during 2009 before she moved to US. I suppose we will need to amend the return to report her income in India and also claim Foreign Tax Credit if eligible. Regarding that, I was wondering how the income is to be reported. In India, the fiscal year runs from April to March of next year, and we receive W-2 equivalents (called Form-16 in India) accordingly. Do I have to calculate her income earned from Jan 01, 2009 until Nov 28, 2009 or reporting income from the latest fiscal year (Apr 01, 2009 to Nov 28, 2009) will suffice? Also, for converting the currency (from INR to USD), what exchange rate should we consider or should we report the foreign income in native currency and IRS will take care of converting?

I suppose we will need to attach copies of the W-2 equivalents (Form-16s) while we amend the return?

Also, on the original post - given what you have said that "we chose to be treated as residents" in the return, are we still correct in claiming Making Work Pay credit?

Thanks again for helping out. We really appreciate this.

Since the original filing as a resident WAS correct, then claiming the Making Work Pay Credit was also correct.

You have to report ALL income earned from 1 January to 31 December 2009, but you do NOT provide proof of the foreign pay with the amendment. However, be ready to PROVE what she earned and paid in Indian taxes, if asked.

You MUST convert INR to USD. When you convert her income and taxes paid, you can:

1) Use the AVERAGE conversion rate for 2009, or

2) Use the conversion rate for the mid-point of 2010 (1 July 2009), or

3) Use the conversion rate for each day she received the pay.

However, you MUST be consistent. If you convert the PAY using Option #1, you must convert the TAX the same way.

If you need professional help filing the amendment, email me a [email protected].