I have a tricky question regarding dual-status alien tax filing
from an international organization (United Nations) while in G-4 (exempt individual
status). Basically, the situation is as follows:
1. Me and my wife were in G-4 status from Jan 1 -- Oct 23 this year.
2. During this time, I was working for a US
employer and being paid US sourced income while my wife worked for the UN and was paid by the UN.
3. Since Nov 1, I've been in H-1B status and my wife's been in H-4 status, i.e. my wife has had no income for the end of the year.
My original plan for filing taxes was the following:
1. I file as married filing separately
a dual status return
claiming residency starting Nov 1.
2. My wife files a nonresident
tax return for the year and reports income as zero, since the UN income while in G-4 status isn't US taxable.
My main concern is if I could somehow manage to do a dual status alien tax return while filing jointly, thus getting better tax brackets, AND avoid paying taxes on my wife's income while she's been in G-4 status? Basically, I'm wondering if the following is possible:
1. We would file a dual status return filing as married filing jointly
and claiming resident status starting Nov 1.
2. I would include my US sourced income on the nonresident part and my wife would leave out any income she was paid by the UN for the nonresident part of the year (i.e. this wouldn't be US sourced income)
=> Only my income would become taxable, but I would enjoy the lower filing jointly tax brackets.
I'm afraid that doing this would somehow get the IRS
a hold of her UN income, which would end up costing us tens of thousands. In other words, is it possible to be able to file jointly as dual status while still avoiding paying any tax on the UN income for the nonresident part of the year.