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File as resident alien using first-year choice?
I'm in the US on F-1 since September 2014. My spouse entered US in March 2017 on F-2. On October 1st 2017, I changed from F-1 to H-1B and my spouse changed from F-2 to H4. My spouse had no income in 2017 (US or India)
I do not meet the green card test or substantial presence test for 2017. Hence if I were to file 1040NR, I see the following disadvantages:
- cannot file jointly
- cannot claim spouse as exemption (since India-US tax treaty is only for students and I was on H-1B at the end of 2017)
- cannot file for her ITIN (W-7) since no valid reason to file (claiming exemption is a valid reason, but I cannot claim as said above)
- cannot use TurboTax (doesn't support 1040NR) or Sprintax (doesn't support HSA forms)
But I recently read about First-Year Choice (Pub. 519) and I think both of us may qualify to elect as dual-status aliens, and elect to be treated as resident-aliens for entire year of 2017. This is how:
Also I'm not sure when we qualify for Substantial presence test in 2018. Do we need to file Form 4868 for an extension, jointly? And my wife doesn't have SSN/ITIN so what should we mention on the Form 4868? We plan to add the form W-7 (ITIN application) to our joint returns that we will file later (when we meet substantial presence for 2018).