@manuez35 , let me go over a few things first before you choose the first year choice --
(a) in your particular and were case since you were admitted 07/23/2022 ( and assuming that you were not present any days in 2021, and 2020), you will generally meet SPT ( all days present in 2022 + 1/3 rd days in 2021 and 1/6th days in 2020) around Jan 26th 2023. This is because we are dealing with tax year 2022.
(b)As quoted below , if you choose to exercise the first year option to be treated as a resident for the year , your first day of residency starts on July 24th of 2022 -- the first full day that you were present in the USA. and you are resident till 12/31/2022.
Residency Starting Date Under the First-Year Choice
If you do not meet either the green card test or the substantial presence test for the current year (for example, 2021) or the prior year (2020), and you did not choose to be treated as a U.S. resident for part of the prior year (2018), but you meet the substantial presence test in the following year (2022), you can attach a statement to your income tax return choosing to be treated as a U.S. resident for part of the current year (2021). To make this first-year choice, you must:
- Be present in the United States for at least 31 days in a row in the current year, 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 the current year. (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 include any days in the United States as an exempt individual under any of the days of presence in the United States exceptions to the substantial presence test.
If you make the first-year choice, your residency starting date for the current year is the first day of the earliest 31-day period (described in 1 above) that you use to qualify for the choice. You are then 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.
(c) Since there is no allocation possibility of standard deduction, you will have to use itemized deduction , just as you would do if you filed as a Non-Resident Alien.
(d) This choice would also mean exposing your foreign earnings but from ONLY the day you became a resident --- so you cannot use your earlier income in India ( not eligible for foreign earned income exclusion, no foreign tax deduction / credit ).
Thus I see no advantage to you as far as being able to use the Standard Deduction to reduce taxable income and thus tax liability.
For 2023, you are resident for the whole year and indeed can file form 1040, use standard deduction and for your child school fees should be deductible ( with
So I am at a loss as to how to help ameliorate your tax burden in a legal way . I am assuming here that both you and your spouse are citizens of India and were working in India for a local entity.
Is there more I ca do for you ?
pk
