Instructions for filing taxes with spouse outside of the country

[ZahidAntara 1]

I have noticed conflicting advice with regard to filing taxes whilst the spouse of a USA citizen is out of the country. This is the procedure we used. It is recommended that once married, for maximum financial benefit, the spouses file as married, filing jointly. The foreign spouse does NOT need to be in the USA in order to do this.

Firstly, it is impossible to e-file, as e-filers need SSN's for both spouses. As the non USA spouse will not have an SSN, it is necessary to apply for an ITIN number.

The procedure is as follows:

Download IRS form W7, and the instructions from the IRS website.

http://www.irs.gov/pub/irs-pdf/fw7.pdf

http://www.irs.gov/pub/irs-pdf/iw7.pdf

The foreign spouse must complete the form, sign it and send it to the USA spouse complete with a notarized copy of their passport.

On receipt, the USA resident has to file taxes by mail. I highly recommend Turbo Tax 2010, as this program allows a the IRS tax returns to be easily printed and filed. As stated above, you can NOT use the e-file feature, you print the tax return the old fashioned way.

http://turbotax.intuit.com/

Once you have completed (married, filing jointly) and printed the return, gather your supporting documents, attach your foreign spouses completed W7 form to the front, and mail to:

Internal Revenue Service

ITIN Operation

P.O. Box 149342

Austin, TX 78714-9342

You must do this before April 17th 2011. Once this is received, an ITIN number will be issued, and the tax form processed. You should get your refund in around 8 weeks, as it takes 6 weeks to get the ITIN number allocated.

That's all there is to it.

thanks for your post man.... i was married on 12/21/2010 and my wife is currently living in Bangladesh. she was my dependent only for 8 days. should i still file jointly for the max tax benefit... please advice

[Val and Gary 29]

thanks for your post man.... i was married on 12/21/2010 and my wife is currently living in Bangladesh. she was my dependent only for 8 days. should i still file jointly for the max tax benefit... please advice

Well, normally I would advise to do that, but with your wife being in Bangla Desh it may be easier to file as married, filing separately. As your wife will have to have her passport copied and an Apostille added. Bangla Desh is NOT recognised under the Hague convention, so this cannot be done.

To file married seperately, follow the guide, but under SPOUSES SSN, enter NRA. You will have to WRITE this in after printing, but the IRS WILL process it.

To file jointly, you HAVE to have your wife's passport notarised, and you can only do that, if it is sent to you in the USA> Whether you want to risk that, is up to you.

Hope that helps.

Edited February 7, 2011 by Val and Gary

[Me and my wife 9]

I have quoted 2009 tax return on the I 864, as this years will not be processed in time. If you have any doubts, hold off filing until your case gets to NVC. Providing you file before April 17th, complete with W7, you'll be OK.

Did you mean hold on till my case is completed on NVC? I want to show mt tax return for this year as I did not have income last year. Please advice

[elya4848 3]

Kindly help me out with the following questions I have about filing taxes.

Me US Citizen. Wife Canadian. Married August 2010. I-130 applied for and pending. Wife lived in US part 2010/ did not work in US - otherwise lived and worked in Canada for rest of 2010.

I am filing our US taxes as "Married filing jointly" and claiming wife as exemption. Filling out Form W-7 for her ITIN.

Questions:

1. Do I have to include wife's Canadian income in my US tax return?
2. Form W-7: Item 6b - Foreign tax ID no - what do I enter in this section - Canadian SIN?

Thank you

1. Yes

2. Yes

[M&Pooh 12]

Most ( probably, all ) states will gladly tax the foreign spouse's income as well. There is no such thing as foreign tax credit on the state level.

Unless you're able to do the foreign income exclusion on the federal return - that changes AGI and completely excludes that part of the income from consideration.

one thing that hasnt been mentioned here...how do we deal with the state tax issue? =/ Federal seems to be pretty straightforward, but not sure about the state tax.

[JerryA 1]

I was planning to apply as "Married filing jointly" with Candian wife as US Resident for tax purposes.

Questions:

1. How does she meet the criteria for "Foreign Earned Income Exclusion" Form 2555 or Form 2555EZ?
   
2. If she does not meet criteria, does that mean we end up paying taxes in Canada & US? Double jeopardy!!!
   

Thank you for above answers...!

[CarlosAndSveta 808]

I was planning to apply as "Married filing jointly" with Candian wife as US Resident for tax purposes.

Questions:

1. How does she meet the criteria for "Foreign Earned Income Exclusion" Form 2555 or Form 2555EZ?
2. If she does not meet criteria, does that mean we end up paying taxes in Canada & US? Double jeopardy!!!

Thank you for above answers...!

If you can't exclude your wife's Canadian income you can then try to claim a Foreign Tax Credit or a Foreign Tax Deduction for the Canadian taxes she pays on her income. Usually the Foreign Tax Credit is better..

[mr2fyre 3]

Here is a link to the approved acceptance agents:

http://www.irs.gov/individuals/article/0,,id=96304,00.html

[mr2fyre 3]

one thing that hasnt been mentioned here...how do we deal with the state tax issue? =/ Federal seems to be pretty straightforward, but not sure about the state tax.

For california I found a document that states the same as the federal about the non resident alien spouse not in the country. however it was a 2008 document, so I will have to do some more research. I plan on calling the state tax board.

[Ashley_Armando 1]

Thanks for the detailed steps!

I have noticed conflicting advice with regard to filing taxes whilst the spouse of a USA citizen is out of the country. This is the procedure we used. It is recommended that once married, for maximum financial benefit, the spouses file as married, filing jointly. The foreign spouse does NOT need to be in the USA in order to do this.

Firstly, it is impossible to e-file, as e-filers need SSN's for both spouses. As the non USA spouse will not have an SSN, it is necessary to apply for an ITIN number.

The procedure is as follows:

Download IRS form W7, and the instructions from the IRS website.

http://www.irs.gov/pub/irs-pdf/fw7.pdf

http://www.irs.gov/pub/irs-pdf/iw7.pdf

The foreign spouse must complete the form, sign it and send it to the USA spouse complete with a notarized copy of their passport.

On receipt, the USA resident has to file taxes by mail. I highly recommend Turbo Tax 2010, as this program allows a the IRS tax returns to be easily printed and filed. As stated above, you can NOT use the e-file feature, you print the tax return the old fashioned way.

http://turbotax.intuit.com/

Once you have completed (married, filing jointly) and printed the return, gather your supporting documents, attach your foreign spouses completed W7 form to the front, and mail to:

Internal Revenue Service

ITIN Operation

P.O. Box 149342

Austin, TX 78714-9342

You must do this before April 17th 2011. Once this is received, an ITIN number will be issued, and the tax form processed. You should get your refund in around 8 weeks, as it takes 6 weeks to get the ITIN number allocated.

That's all there is to it.

[JerryA 1]

Tax question for 2010 - foreign earned income exclusion Form 2555EZ:

Me US Citizen. Wife Canadian. Married August 2010. CR-1 pending.

Wife lived and worked in Canada for Canadian company/ employer the whole of 2010.

She lived in Canada continuosly since 2002, Canadian citizen, Tax home country = Canada all these years, Employer = Canadian.

Continues to be a bonafide residence of Canada in 2010....!

I am filing our US taxes as "Married filing jointly" and claiming wife as exemption. Filling out Form W-7 for her ITIN.

Trying to apply for foreign earned income exclusion Form 2555EZ. After reading the instructions for 2555EZ again, I find the bonafide residence test kinda confusing....!

Is the physical presence test (330 days in 2010) necessary too to qualify as a bonafide resident for US tax purposes for 2010?

She visited me in the US a few times in 2010 - making her days in Canada in 2010 = 310 days total.

Can we still apply for foreign earned income exclusion???

Thank you.

[xelance 31]

For california I found a document that states the same as the federal about the non resident alien spouse not in the country. however it was a 2008 document, so I will have to do some more research. I plan on calling the state tax board.

Im in california as well...if you get an answer to this, please let me know. Thanks a lot

[Nich-Nick 3,354]

Tax question for 2010 - foreign earned income exclusion Form 2555EZ:

Me US Citizen. Wife Canadian. Married August 2010. CR-1 pending.

Wife lived and worked in Canada for Canadian company/ employer the whole of 2010.

She lived in Canada continuosly since 2002, Canadian citizen, Tax home country = Canada all these years, Employer = Canadian.

Continues to be a bonafide residence of Canada in 2010....!

I am filing our US taxes as "Married filing jointly" and claiming wife as exemption. Filling out Form W-7 for her ITIN.

Trying to apply for foreign earned income exclusion Form 2555EZ. After reading the instructions for 2555EZ again, I find the bonafide residence test kinda confusing....!

Is the physical presence test (330 days in 2010) necessary too to qualify as a bonafide resident for US tax purposes for 2010?

She visited me in the US a few times in 2010 - making her days in Canada in 2010 = 310 days total.

Can we still apply for foreign earned income exclusion???

Thank you.

She qualifies as a bonafide resident and that's all she needs to qualify on. Remember this form is also for US citizens who may be working abroad, so they want to make sure they were really residents of a country or there for a long time and not just trying to exclude some income because they went to Canada for a month.

Has anybody mentioned for those spouses not holding greencards yet, you must write a statement saying you both wish for the non-resident alien to be treated as a resident alien for tax purposes. It's on page 10 of Pub. 519....third column I think.

[Brusik 11]

As I said in another post depositing the check will be difficult... Someone mentioned a W-8BEN form.. I called my banker and they said I can't add wife to my account unless she is physically there.. So married filing jointly doesn't seem like a viable option..

[fermat 32]

Nobody has mentioned this so far but I believe it's important to those filing jointly for the first time. According to the folowing link: http://www.irs.gov/publications/p519/ch01.html#en_US_publink1000222193, if your spouse is living outside of the country he/she is a "nonresident alien". If you want to file married jointly, the spouse must be treated as a "resident alien". In order to do that you need to make the choice to treat your "nonresident" spouse as a "resident" spouse for tax year 2010. According to the article you need to attach a statement to your tax return:

Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following information:

1. A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year, and that you choose to be treated as U.S. residents for the entire tax year
2. The name, address, and identification number of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)

It's around $93,000 exclusion, so if she makes less than that it's completely tax-free.

If you can't exclude your wife's Canadian income you can then try to claim a Foreign Tax Credit or a Foreign Tax Deduction for the Canadian taxes she pays on her income. Usually the Foreign Tax Credit is better..