USA - 2005 Income Tax questions for K-1 visa holder

[rmarion 0]

Hello,

I am sure countless people in this forum living in the USA have questions about how to deal with the cryptic tax rules and how they apply to a non-US citizen spouse. It's complicated!

Here's our situation:

I'm a US citizen working full-time in the USA.

My wife is a foreign national here in the USA on a K-1 visa. We got married in December 2005. She's never worked in the USA at all but did earn income in her home country of Venezuela in 2005.

We have no dependents.

I have a W-2 form but she does not. For her all I have is a one page sheet from her employer that shows her total earnings.

So...

What I want to do -- and can do -- is file our tax return as "married - filing jointly". I ran the numbers initially through Turbo Tax software and it did ask about all the pertinent questions including income from foreign sources. At the end of the data entry it spat out a form 1040EZ.

To file jointly it is my understanding that for tax purposes my wife must be treated as a US resident and thus report her foreign earnings (converted to dollars) for US-taxation purposes. She is not subject to any special exclusions or tax treaty with her home country.

We had no other income other than our jobs of 2005. And there is no special deductions we are taking.

So my questions are:

1 - IS the 1040EZ form okay to turn in in this scenario?

2 - I have a W-2 but she does not. So what do I send the governemnt im lieu of a W-2? There has to be some special form. I found something called an IRS Form 4852 that is a W-2 substitute. Is that what I turn in?

3 - What else am I missing that I don't need to miss?

Any advice is GREATLY appreciated. I'm sure many others are curious about what to do at tax time too! Thanks!!

[Kathryn41 3,205]

My husband and I were in a similar situation last year. We had to paper file because the form used to declare foreign income and foreign tax credit is not one of the e-fileable ones. Basically, we filed married-jointly, declared my Canadian income converted into US dollars based on the exchange rate on the date I immigrated (and that clearly explained in a covering letter), included a copy of my Canadian income tax return to show my Canadian tax paid, then claimed the foreign tax credit. I had no W-2s but used the Canadian equivalent. Include the employer's statement of payment and if she can get anything official from the Venezuelan government identifying tax paid, include that. We had our claims processed and accepted without a problem. We also invested in one of the big tax guides that are printed at this time of year after checking which one had the best information on the Foreign income/foreign tax credit situation. I really recommend taking that route and then going to the IRS websites for questions. I did have an enquiry - emailed them with it and got back a response very quickly that gave me the information I needed. Good luck.

[rmarion 0]

Thanks for the reply. Do you happen to recall if you turned in your things on just a single IRS form -- like the 1040EZ? I have a statement from her employer showing her earnings but will not be able to get anything more than that.

[rmarion 0]

Also in our situation:

My wife did not have to worry about paying income tax in her country. Venezuela obviously works different than we do.

So we are not worried in her case about tax exemption, taxes paid in her homeland, etc.

All I want to do is file married - jointly, add her income to mine, and based on that (and the tax I have already paid for 2005) come up with a sum total to which we will either receive a refund or owe Uncle Sam some money. There's really nothing else hard about this, well except for the confusing array of forms, cryptic information in government documents and websites, etc.

We aren't even claiming any dependents or deductions. This is perfect for 1040EZ if the whole thing of her being a foreign national doesn't blow simplicity out of the water....

Thanks again!

[Kathryn41 3,205]

I would suggest that you contactl the IRS directly through the link on their website at: <www.irs.gov> and ask them directly. There are different variables in your situation than we faced, and they are the best ones to give you the correct information for your return. Your wife is considered a 'dual status alien' for the tax year in which she immigrated. We chose the section 6013 h) election, used the 1040 regular form, not the EZ, claimed the spousal deduction and applied for the foreign tax credits with form 1116 "Foreign Tax Credit". You will need to determine first if your wife meets the substantial presence test for tax purposes residency and if there is a foreign tax treaty with Venezuela that supercedes some parts of the law. I also really strongly advise you to check one of the relevant publications. We found the 'Ernst & Young Tax Guide 2005" to be extremely helpful even in determining what questions it was necessary to ask in order to do our taxes correctly and to our best advantage. Good luck

Edited February 12, 2006 by Kathryn41