Hi there,

I am in the US on an L1-B since Jan 16, 2007 (transferred by my company & paid the entire time by the U.S. employer) and have gone back to Canada to visit family on 2 occasions for a total of 21 days throughout 2007. From what I can understand, I pass the time test to file as a resident alien - is this correct? If so, then do I simply file the standard 1040?

Also, I received moving expenses in a lump sum format (not allocated to any particular expense - basically here is the money use it for what you need) which was added to my wages and is part of the total in box 1 of my W-2. I also received a tax assistance gross-up which also gets added to my income in box 1 (apparently this is becoming the more popular way for employers to assist employees with moving). From what I understand regarding this situation I can deduct my moving expenses to move from Canada to the US since my employer did not pay anyone directly for my expenses. Am I correct in stating this? I utilized TurboTax to assist me with my taxes and it did not state that I needed any other 1040 form but the standard one. I am assuming this is correct but it is a piece of software subject to errors :).

Lastly, are there any other deductions I would qualify for relating to my employment status? I have heard about Foreign Tax Credit but do not fully understand what that is all about nor how to report it (or if I even am allowed to do so)

Any insight to my situation would be appreciated.

Thank-you in advance :)

L1 is work visa, and since you have met Substantial Presence Test you will file resident tax return.

Your employer has added moving expenses paid to you in box 1 of W2 that is it has been reported as taxable income. Now you must file Form 3903 to claim the moving expenses.

When you file a resident tax return, you must report your worldwide income. If you paid any taxes on this income in a foreign country, then you file Form 1116 to claim foreign tax credit. Read: Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income

The correct answer is that you are a dual status alien and must file Dual Status.

I agree with TTE about dual-status return IF Rantek is single and the family he visited in Canada were parents and siblings.

If he is married, he has the choice of filing jointly with his/her wife and they BOTH choose to be treated as resident aliens, in which case filing Form 1040 would be the correct course of action.

To be more specific, we need to know Rantek's marital status.