Tax return for the H1B's that arrived 1 Oct 2009
 

My conclusions so far are (and please correct me if you think I'm wrong!) that if you arrived on the 1st of October 2009 (I'm on an H1B), then you will not have met the Substantial Presence Test until around 2nd June 2010. So the Tax Return for 2009 cannot be done as a Resident Alien.

Neither will you be able to make the "First Year Choice" (as per Publication 519) to be treated as a US Resident for tax purposes, as one of the requirements is that you meet the substantial presence test for 2010 (which I won't until June 2nd).

Therefore, I can either ask for a delay in filing my tax return, so I can do it AFTER June 2nd and file a standard 1040 as a Resident Alien (claiming 1st year choice)... OR.... file a 1040NR before the 15th April as a nonresident alien for 2009.

Does that sound right? :confused:

Is there an advantage of one filing a 1040 rather than a 1040NR? The only one I can see so far is that the H&R Block software I bought only fills in a 1040 for you, and NOT an 1040NR.

Re: Tax return for the H1B's that arrived 1 Oct 2009
 

Don't know all my tax laws, sorry. However, there are certain things you cannot do with 1040NR. I think the H&R block software mentioned that For example, you cannot claim the standard deductions in 1040NR, you can only itemize your deductions. With 1040NR, you cannot claim moving expenses when you move out of the U.S, and you can't claim certain credits.

THe biggest benefit of filing with 1040NR is you won't be taxed on income not connected to the U.S. (Example your income prior to your arrival to the U.S. in Oct 2009)

Re: Tax return for the H1B's that arrived 1 Oct 2009
 

Ah - that's interesting. I did want to put down my expenses for moving TO the US, which I'm told I could do. I think I'll need to look closer at that. Perhaps filing for an extension would be the best thing....

I do have UK income (renting my flat), but I was already taxed on that by the UK government so I shouldn't be taxed twice, and I had to register my UK savings accounts, but the interest is so measly right now that the tax on it will be sweety money (the ISA being the only one I think Uncle Sam will want some payment for as I didn't pay UK tax on it).

Re: Tax return for the H1B's that arrived 1 Oct 2009
 

Note that for 2010 the UK gov will tax your rental profit, but your UK personal allowance (circa GBP7K from memory) allows a chunk of the profit to be tax-free.

In the US you will have used up any personal allowance with your salary, so all the profit will be taxed at your marginal rate. Any tax paid in the UK is allowed to be deducted from the amount you pay in the US, but the "loss" of personal allowance tends to mean you pay US tax on the first $ of any profit.

I assume you are fully up on the NRL1 etc.

Re: Tax return for the H1B's that arrived 1 Oct 2009
 

Advantage of Resident can be the various deductions, and the ability to file as married filing joint (which makes a big difference if your spouse is unwaged on an H4).

You can run it both ways and see what comes out best.

I filed for an extension so that I could meet the Substantial Presence Test. One thing to watch out for is that as a Resident, you owe tax on worldwide income. This can be addressed by either filing as "Dual Status" (non-resident for portion of year before arrival, resident for after you arrived, watch out for visits earlier in the year) or "Foreign Earned Income" exclusion.

Re: Tax return for the H1B's that arrived 1 Oct 2009
 

I did wonder about this.... my concern was that like with an ISA, the IRS wouldn't much care for the tax-free allowance/status, and just consider it as not having tax paid, and therefore tax me on it. Is that not the case?

I did fill my NRL1, but evidently not quick enough, as they taxed me on my income! Oh well, looks like either way I'll be paying that tax into the UK coffers.

I only made a 2 day visit back in May, so I think I'm okay on that front.

Thanks both for your advice. :thumbup:

Re: Tax return for the H1B's that arrived 1 Oct 2009
 

Nope. Your status for 2009 is non-resident. You didn't pass the substantial prescence or the green card test for 2009. Filing an extension to file 2009 taxes doesn't change that.

Re: Tax return for the H1B's that arrived 1 Oct 2009
 

But I believe that if one passes the substantial presence test for 2010, one can opt to be treated as resident for the portion of 2009 after arrival in US. See "First Year Choice" in IRS Pub 519.

Re: Tax return for the H1B's that arrived 1 Oct 2009
 

True- if you make the special election; merely filing the extension doesn't mean you took the election. Should have been clearer in my original post. :thumbup: