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Old 07-17-2012, 06:13 AM
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Tax Deduction& Returns when Spouse is a NRA

Hi

I am from India and working the in US on my H1 visa. I have a wife and child who live in India. They have valid H4 dependant VISAs, but haven't been to the US.

Which Marital Status should I use while submitting returns to get maxmium tax benefits?
And what all are the procedures for that? Also, I do not have my spouse and child's original passport/visa with me right now.

Whether the income earned by my wife in India is subject to US taxes also?

Please help me to clear my doubts.


Thanks in advance,
sajiawy



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Old 07-17-2012, 02:25 PM
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“I am from India and working the in US on my H1 visa. I have a wife and child who live in India. They have valid H4 dependant VISAs, but haven't been to the US. “Which Marital Status should I use while submitting returns to get maxmium tax benefits?”---> It depends on the situation. The H-1B visa holder who has been in the US for the entire tax year (in other words, you entered the U.S. on your H-1B visa prior to January 1, 2012) is considered a resident alien and will file Form 1040, 1040A or 1040EZ. You will pay taxes at the state and federal level at the same tax rates as U.S. citizens, and are liable to pay Social Security and Medicare taxes. You can claim all the exemptions and credits which are available to U.S. citizens, to include filing jointly with your spouse (even if she is living in INDIA) and claiming the exemptions for your children (as long as the children lived with you in the U.S. for more than half of the year, NOT in INDIA). To file jointly with your spouse and/or to claim the exemptions for your children, you must either apply for and receive valid Social Security numbers for them or request Individual Tax Identification Numbers by filing a Form W-7 for your spouse and each child when you file your first tax return. As long as you entered the US before July 3rd during the tax year 2012, you will meet the Substantial Presence Test (which requires presence in the U.S, for at least 183 days) and are considered dual-status aliens and must file a dual-status tax return, which, for you, consists of a Form 1040 with a Form 1040NR as an attachment. In most cases, you cannot claim the Standard Deduction, cannot file jointly with your spouse (though you can claim your spouse and children as dependents), cannot claim the Head of Household filing status, and cannot claim either the Earned Income Credit, the education credits or the credit for the elderly or disabled. As you may have guessed, the dual-status return is somewhat complicated and probably should NOT be filed without professional help. Since you are married and as long as your wife is with you on a H-4 visa, you can both choose to be treated as resident aliens, regardless of whether you entered the US before or after July 3rd 2012. If you arrived before July 3rd,2012, you are already dual-status. If you arrived after July 2nd,2012, you would have to use the First Year Choice option (and file the First Year Choice statement), then meet the requirements for choosing to file as a resident alien as well. These requirements are; Be a non-resident alien at the beginning of the year;Be a resident alien at the end of the tax year; Be married at the end of the year;Your spouse must join you in this choice.
“And what all are the procedures for that? Also, I do not have my spouse and child's original passport/visa with me right now.”----> As described above.



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Old 07-18-2012, 03:55 AM
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Quote:
Originally Posted by Wnhough View Post
“I am from India and working the in US on my H1 visa. I have a wife and child who live in India. They have valid H4 dependant VISAs, but haven't been to the US. “Which Marital Status should I use while submitting returns to get maxmium tax benefits?”---> It depends on the situation. The H-1B visa holder who has been in the US for the entire tax year (in other words, you entered the U.S. on your H-1B visa prior to January 1, 2012) is considered a resident alien and will file Form 1040, 1040A or 1040EZ. You will pay taxes at the state and federal level at the same tax rates as U.S. citizens, and are liable to pay Social Security and Medicare taxes. You can claim all the exemptions and credits which are available to U.S. citizens, to include filing jointly with your spouse (even if she is living in INDIA) and claiming the exemptions for your children (as long as the children lived with you in the U.S. for more than half of the year, NOT in INDIA). To file jointly with your spouse and/or to claim the exemptions for your children, you must either apply for and receive valid Social Security numbers for them or request Individual Tax Identification Numbers by filing a Form W-7 for your spouse and each child when you file your first tax return. As long as you entered the US before July 3rd during the tax year 2012, you will meet the Substantial Presence Test (which requires presence in the U.S, for at least 183 days) and are considered dual-status aliens and must file a dual-status tax return, which, for you, consists of a Form 1040 with a Form 1040NR as an attachment. In most cases, you cannot claim the Standard Deduction, cannot file jointly with your spouse (though you can claim your spouse and children as dependents), cannot claim the Head of Household filing status, and cannot claim either the Earned Income Credit, the education credits or the credit for the elderly or disabled. As you may have guessed, the dual-status return is somewhat complicated and probably should NOT be filed without professional help. Since you are married and as long as your wife is with you on a H-4 visa, you can both choose to be treated as resident aliens, regardless of whether you entered the US before or after July 3rd 2012. If you arrived before July 3rd,2012, you are already dual-status. If you arrived after July 2nd,2012, you would have to use the First Year Choice option (and file the First Year Choice statement), then meet the requirements for choosing to file as a resident alien as well. These requirements are; Be a non-resident alien at the beginning of the year;Be a resident alien at the end of the tax year; Be married at the end of the year;Your spouse must join you in this choice.
“And what all are the procedures for that? Also, I do not have my spouse and child's original passport/visa with me right now.”----> As described above.
Hi Wnhough,

Thanks a lot for the response.



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