Dear JU
As I answer your specific questions, let me
also share some concepts with you.
For
tax purposes, if you are not a US
Citizen, you are an alien.
If
you do not meet the tests for being a Resident
Alien, you are considered a Nonresident
Alien.
You
are considered a Resident Alien if you are a green card holder or were physically
present in the country
1. for 183 days or more in 2013 or
2. 31 days in 2013 and 183 days during the prior 3 year
period that includes 2013 (counting all days you were present in USA), 2012 (counting one third of the days you
were present in the US) and
2011 (counting one sixth of the days you were present in the US)
From the dates that you have posted, it
seems that you do not meet the substantial presence test, and thus are a Non Resident in 2013.
As you were a Non Resident in 2013, you could still make the First Year Choice (full details on Page 7 of IRS Publication 519,
U.S. Tax Guide for Aliens http://www.irs.gov/pub/irs-pdf/p519.pdf
) if you meet the substantial presence
test for 2014, you can choose to be treated as a U.S. Resident for part of
2013.
If you make this choice, you cannot file
your returns for 2013, till you meet the substantial presence test for 2014.
You would need to file an extension and wait till you meet the test before
filing your returns.
If
you are a U.S. resident for
the calendar year, but you were not a U.S.
resident at any time during the preceding calendar year, you are a U.S.
resident only for the part of the calendar year that begins on the residency
starting date. You are a nonresident alien for the part of the year before that
date.
You
have a dual-status tax year when you have been both a resident alien and
a nonresident alien in the same year.
Thus, in your case, should you choose to
make the first year choice, you will be considered a Non Resident Alien for the
initial part of the year and a Resident Alien for the latter part. You will
have dual status.
Generally, a status of Married Filing Jointly gives the lowest tax exposure.
Generally,
you cannot file as married filing
jointly if either spouse was a nonresident alien at any time during the tax
year.
However,
you can choose to treat her as a US
resident (refer page 9 of Pub 519 – Nonresident
Spouse Treated as a Resident)
If
you make this choice, you and your spouse are treated for income tax purposes
as residents for your entire tax year. Neither you nor your spouse can claim
under any tax treaty not to be a U.S. resident. You are both taxed
on worldwide income. You must file a joint income tax return for the year you
make the choice, but you and your spouse can file joint or separate returns in
later years.
She
may be entitled to foreign income exclusion for her income in your home country
and / or to a foreign tax credit for taxes paid by her. You should navigate
through TurboTax to help the program evaluate if she is entitled to any of
these benefits
As
she is on an H4, she will not be entitled to have a Social Security number and
you will need to apply for an ITIN (Individual Tax Identification Number) by
filing form W7 along with your return. She does not need be present in the US for her to get an ITIN.
Your
return cannot be e-filed if you do not have a social security number or an
ITIN, when you are filing your return.
TurboTax
does not support form W7 but you can download and prepare the form Here are
links for the form http://www.irs.gov/pub/irs-pdf/fw7.pdf
and the instructions http://www.irs.gov/pub/irs-pdf/iw7.pdf
for your reference.
Another thing you need to be aware of is that Residents have to file a
return reporting worldwide income whereas Non Residents have to report only US
sourced income.
You have to determine what position gives
you the best tax benefit. Should you choose to be treated as a Resident, you will need to file either Form 1040, 1040A or 1040EZ, which are
all supported in TurboTax. Please see the formats of the statements and
elections (See Pub 519) that are required to go along with the return for the First
year Choice and to treat your wife as a Resident Alien. These statements need
to be prepared separately and attached to the return. The W7 (instructions
given earlier) will also have to attached.
Should you choose to be treated as a Non
resident Alien for 2013, you will need to use Form 1040NR or1040NR EZ, both of
which are not supported by TurboTax.
I trust you will find this response
helpful, and do reply to this post, if you have further questions.
Best Regards
Dalip, CPA
