Tax Question

[rin and john 71]

Now time to move on and figure out when foreign step-children become dependents! (I never got a very clear answer from the IRS helpline in three calls to them - the last lady basically told me to include them on my return and the IRS would let me know if it is allowed)

Why is that so difficult? Just do the residency and dependancy test....

To claim a dependency exemption for a qualifying relative, the following dependency tests must be met:

1) The member of household or relationship test,

2) The citizen or resident test,

3) The joint return test,

4) The gross income test, and

5) The support test.

based on your timeline data alone..

Tax Year 2007

1) Member of household or relationship test?

Member of household? NO did not live the entire year

Relationship? YES, stepchild

2) Citizen or resident?

Citizen? NO

Resident?

greencard? NO

substantial presence (more than 173 days)? YES

Resident alien for tax purposes!!!

Joint Return Test

Able to be claimed on another taxpayers return? NO

Gross Income Test

Did the person's gross income equaled or exceeded the exemption amount for the tax year? NO

Support Test

Did you contribute more than half of there support? I assume YES

You pass all required

DEPENDANT!!!

Well, the children didn't follow to join until October 2007. So they didn't have "substantial presence" for the tax year (would apply for anyone whose stepchildren entered the US in the second half of the year). The publication on dependents allows for children living outside of the USA being claimed, but only in Canada, Mexico, and S. Korea.

When I spoke to the lady at the IRS, she said I couldn't claim them. However, when I asked about the scenario when during a first year election, an individual can declare resident status once they have substantial presence in the subsequent year, she seemed less sure. Additionally, a child is typically considered to have residency based on their parent with allowances made for certain absences, including attending school. Since they were enrolled in Bangkok and came here after the term ended, that was another argument in our favor. So we waited until September 2008 to file our taxes. By then we had SSNs, file MFJ, declared the children as dependents, and received the tax rebate check (the primary reason for waiting for the EAD and SSNs).

Both Turbotax and Taxcuts did not count them as dependents due to the substantial presence not being met.

Edited January 17, 2009 by rin and john

[rin and john 71]

From Pub 519:

First-Year Choice

If you do not meet either the green card test or the substantial presence test for 2006 or 2007 and you did not choose to be treated as a resident for part of 2006, but you meet the substantial presence test for 2008, you can choose to be treated as a U.S. resident for part of 2007. To make this choice, you must:

Be present in the United States for at least 31 days in a row in 2007, and

Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of 2007. For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States.

When counting the days of presence in (1) and (2) above, do not count the days you were in the United States under any of the exceptions discussed earlier under Days of Presence in the United States.

If you make the first-year choice, your residency starting date for 2007 is the first day of the earliest 31-day period (described in (1) above) that you use to qualify for the choice. You are treated as a U.S. resident for the rest of the year. If you are present for more than one 31-day period and you satisfy condition (2) above for each of those periods, your residency starting date is the first day of the first 31-day period. If you are present for more than one 31-day period but you satisfy condition (2) above only for a later 31-day period, your residency starting date is the first day of the later 31-day period.

So if children are allowed to make the choice, by meeting residency requirements in 2008, they can be considered residents as of their entry into the USA.

Regarding the residency test, from Pub 501.

Residency Test

To meet this test, your child must have lived with you for more than half of the year. There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents.

Temporary absences. Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances such as:

Illness,

Education,

Business,

Vacation, or

Military service.

Since Rin came in April, they lived with her Jan to Apr and Oct to Dec (ie more than half the year, albeit part of it in Thailand). Also, education is accepted as a special circumstance for temporary absence.

[eng_ashraf12 0]

wow..... didn't think that would be such a touchy question but thanks He hasn't been in the u.s. for the '08 year will be here in 5 days he had 0 income last year and i claimed head of household and single cause the w2 said if they are a non residant alien i couldn't count them. i am a single mother sharing joint custody of two kids. ( I am claiming one the ex the other). So when he gets his SSN and I file the return I can claim joint or file as a dependant (sorry if i am stepping into something) just seeing my options and getting information cause it looks like either way can work.

If you were married in 2008, you can file MFJ for tax year 2008 (filing deadline of April 15, 2009). Your spouse does not have to be present in the USA at any time during the year. With him having zero income, it would save you money to file MFJ vs. HOH (you can calculate your savings using the tax table - http://www.irs.gov/pub/irs-pdf/i1040tt.pdf)

Additionally, your spouse cannot be claimed as a dependent. They are a spouse and receive an exemption, same as you, when you file MFJ.

John

John, thank you so much for the info. it is exactly my case. I am a US Citizen and my wife never been in the US. we got married in 2008. so I am going to file Married filling Jointly. I know I have to attach W_7 form signed by my wife with my 1040 form. do you know what else i should attach with 1040 form?

please let me know.

thank you.

[tom&tata 2]

wow..... didn't think that would be such a touchy question but thanks He hasn't been in the u.s. for the '08 year will be here in 5 days he had 0 income last year and i claimed head of household and single cause the w2 said if they are a non residant alien i couldn't count them. i am a single mother sharing joint custody of two kids. ( I am claiming one the ex the other). So when he gets his SSN and I file the return I can claim joint or file as a dependant (sorry if i am stepping into something) just seeing my options and getting information cause it looks like either way can work.

If you were married in 2008, you can file MFJ for tax year 2008 (filing deadline of April 15, 2009). Your spouse does not have to be present in the USA at any time during the year. With him having zero income, it would save you money to file MFJ vs. HOH (you can calculate your savings using the tax table - http://www.irs.gov/pub/irs-pdf/i1040tt.pdf)

Additionally, your spouse cannot be claimed as a dependent. They are a spouse and receive an exemption, same as you, when you file MFJ.

John

John, thank you so much for the info. it is exactly my case. I am a US Citizen and my wife never been in the US. we got married in 2008. so I am going to file Married filling Jointly. I know I have to attach W_7 form signed by my wife with my 1040 form. do you know what else i should attach with 1040 form?

please let me know.

thank you.

The statement that your non-resident wife is opting to be treated as resident for tax purposes.

http://www.visajourney.com/forums/index.ph...70514&st=30

post # 31

[eng_ashraf12 0]

wow..... didn't think that would be such a touchy question but thanks He hasn't been in the u.s. for the '08 year will be here in 5 days he had 0 income last year and i claimed head of household and single cause the w2 said if they are a non residant alien i couldn't count them. i am a single mother sharing joint custody of two kids. ( I am claiming one the ex the other). So when he gets his SSN and I file the return I can claim joint or file as a dependant (sorry if i am stepping into something) just seeing my options and getting information cause it looks like either way can work.

If you were married in 2008, you can file MFJ for tax year 2008 (filing deadline of April 15, 2009). Your spouse does not have to be present in the USA at any time during the year. With him having zero income, it would save you money to file MFJ vs. HOH (you can calculate your savings using the tax table - http://www.irs.gov/pub/irs-pdf/i1040tt.pdf)

Additionally, your spouse cannot be claimed as a dependent. They are a spouse and receive an exemption, same as you, when you file MFJ.

John

John, thank you so much for the info. it is exactly my case. I am a US Citizen and my wife never been in the US. we got married in 2008. so I am going to file Married filling Jointly. I know I have to attach W_7 form signed by my wife with my 1040 form. do you know what else i should attach with 1040 form?

please let me know.

thank you.

The statement that your non-resident wife is opting to be treated as resident for tax purposes.

http://www.visajourney.com/forums/index.ph...70514&st=30

post # 31

thanks Tom, do i need to include my wife's passport photocopy too?

[tom&tata 2]

wow..... didn't think that would be such a touchy question but thanks He hasn't been in the u.s. for the '08 year will be here in 5 days he had 0 income last year and i claimed head of household and single cause the w2 said if they are a non residant alien i couldn't count them. i am a single mother sharing joint custody of two kids. ( I am claiming one the ex the other). So when he gets his SSN and I file the return I can claim joint or file as a dependant (sorry if i am stepping into something) just seeing my options and getting information cause it looks like either way can work.

If you were married in 2008, you can file MFJ for tax year 2008 (filing deadline of April 15, 2009). Your spouse does not have to be present in the USA at any time during the year. With him having zero income, it would save you money to file MFJ vs. HOH (you can calculate your savings using the tax table - http://www.irs.gov/pub/irs-pdf/i1040tt.pdf)

Additionally, your spouse cannot be claimed as a dependent. They are a spouse and receive an exemption, same as you, when you file MFJ.

John

John, thank you so much for the info. it is exactly my case. I am a US Citizen and my wife never been in the US. we got married in 2008. so I am going to file Married filling Jointly. I know I have to attach W_7 form signed by my wife with my 1040 form. do you know what else i should attach with 1040 form?

please let me know.

thank you.

The statement that your non-resident wife is opting to be treated as resident for tax purposes.

http://www.visajourney.com/forums/index.ph...70514&st=30

post # 31

thanks Tom, do i need to include my wife's passport photocopy too?

http://www.irs.gov/pub/irs-pdf/fw7.pdf

They need to identify that your wife is not eligible for SSN yet - there is a list of document explained in the form itself. Passport is not the only option but it is the easier one. She can get copy of her passport notarized at US consulate in her home country.

[rin and john 71]

Here is the IRS summary:

http://www.irs.gov/businesses/small/intern...d=96370,00.html

[NickD 203]

Had to check back on this one when my wife and step daughter were AOS, that was better than being SOL and did check with my tax attorney on this one. Timing was close, filed later that year very close to that dreaded April 15 date, but did file a joint return and listed her daughter as my step daughter. Was waiting for their EAD so could run to the SS office and get their SS numbers. But that is how our timing worked out and not even sure if I really did need those SS numbers for them, but we got them.

Listed my wife as a homemaker and that is what she was, having two extra person deductions and the much higher married standard deduction help with all the immigration expenses I had. Ha, did ask if I could deduct those government fees, was told only if I had a business and they came here as employees, so struck out on that one. So in effect had to pay taxes on money that was given back to the government.

Head is spinning now, how can our government be broke with all the money I sent them?