Check out some similar questions!

sylviawp · Mar 18, 2009, 02:53 AM

Hi,

I am preparing the tax return for Year 2008, need some help to decide whether I should make the first year choice.

My husband was transferred by his company from UK to US headoffice in Oct 08 with L1 visa. Me and our daughter joined him in Nov08 and stay in US since. He works fulltime and expect to stay US for whole year 2009. I don't have any income in US or UK. We are both UK citizens.

Here are my questions?

1) If my husband make the first year choice for 2008 tax return, what tax status he belongs to? Dual-Status or he will be treated as Resident only for the period from Oct 08 till the end of year 2008?

2) If he make the first year choice for 2008 tax return, then we file a joint return, in Form 1040, we can claim $10,900 standard deduction, and $10,500 ($3,500*3) excmptions as normal resident even though we only stay in US for 3 months for Year 2008. Is it correct?

3) As we don't have much income in UK since we move to US, should I presume that make the first year choice to file 1040 as joint return, will pay less tax compared to my husband file 1040NR on his own? If he file 1040NR, he doesn't have standard deduction, and he can't claim exception for me and our daughter? Is that right?

Your help will be much appreciated.

AtlantaTaxExpert · May 8, 2009, 01:44 PM

1) Dual status. You file jointly ONLY IF you file together. In either case, you must wait until1 Jne 2009 to file.

2) You claim TWO exemptions.

3) Probably.

The Texas Tax Expert · May 8, 2009, 05:37 PM

I think there's a bit of confusion here.

If you elect to file a joint return and be treated as residents all of 2008 you must include your UK income on your US return (not just the UK income earned in the 3 months in which your husband was here).

Five Rings · May 9, 2009, 03:01 AM

Neither of the taxpayers were RSP in 2008; Oct for husband, Nov for wife.
First year choice involves choosing to be resident for PART of the year.

There would be absolutely no benefit to this couple to be treated as resident for the entire year as all their UK income would be added to their US income and push them into a higher bracket, the foreign tax credit notwithstanding.

Dual status is just fine here.

The Texas Tax Expert · May 9, 2009, 06:15 AM

Originally Posted by Five Rings

Neither of the taxpayers were RSP in 2008; Oct for husband, Nov for wife.
First year choice involves choosing to be resident for PART of the year.

There would be absolutely no benefit to this couple to be treated as resident for the entire year as all their UK income would be added to their US income and push them into a higher bracket, the foreign tax credit notwithstanding.

Dual status is just fine here.

I agree that there is no point in filing as joint residents for the whole year. As I pointed out, they would need to include their UK income for all of 2008.

They are not currently dual status -- they would need to elect into dual status. The OP seems to think that this is going to give them the right to file jointly and claim the standard deduction. This is not the case. That option arises only if they elect to be residents for the full year.

sylviawp · May 10, 2009, 08:07 PM

Thanks all the tax experts.

Your answers to my query are great help.

MukatA · May 10, 2009, 10:44 PM

So you can file
1. Nonresident tax return, or
2. Dual status tax return after you complete SPT in 2009, or
3. Joint return as residents after you complete SPT in 2009.
In each case, you can deduct Moving Expenses for the family. Use Form 3903. Your U.S. Tax Return: Moving Expenses