Tax 2010 for Canadian wife

[JerryA 1]

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. Should I be filing as married filing jointly or separately?
   
2. Do I have to include wife's Canadian income in my US tax return?
   
3. If yes, do I need to send her T4 along with my tax return?
   
4. Does she have to file Canadian taxes too for 2010?
   
5. Form W-7: Item 6b - Foreign tax ID no - what do I enter in this section - Canadian SIN?
   

Thank you

[Danu 19]

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. Should I be filing as married filing jointly or separately? Usually filing jointly is better, more tax breaks in there. I would try something like Turbotax, do it both ways, then see which way is better for you
2. Do I have to include wife's Canadian income in my US tax return?
   
3. If yes, do I need to send her T4 along with my tax return? You don't have to, just make sure its somewhere safe incase they ask to see it
   
4. Does she have to file Canadian taxes too for 2010? Yes, she needs to do what is called an exit return. She will file with the paperwork from the province she was in before she moved, and in the details of where she was living Dec. 2010, she will put in the new state she is living in. If she does hers through ufile it will ask her when exactly she left and prorate her taxes properly for her, have her read http://www.cra-arc.gc.ca/E/pub/tg/t4056/t4056-e.html
   
5. Form W-7: Item 6b - Foreign tax ID no - what do I enter in this section - Canadian SIN? - no idea
   

Thank you

[M&Pooh 12]

1. You can do both. Generally, filing jointly is considered be more beneficial financially, but in some situations there is really no big difference. I calculated both scenarios for us for the previous year - almost even.

One thing that many people forgot - STATE RETURN. In most states, there is no such thing as foreign tax credit. So, if you aren't able to completely exclude your wife's income - and you probably won't be able to do thatbased on what you're saying - your state will happily tax your wife's income as well as yours. Consider that when deciding between MFS and MFJ.

2. If MFJ and treating your wife as resident - yes

If MFS - no

3. No.

4.Yes

5. Canadian SIN.

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. Should I be filing as married filing jointly or separately?
   
2. Do I have to include wife's Canadian income in my US tax return?
   
3. If yes, do I need to send her T4 along with my tax return?
   
4. Does she have to file Canadian taxes too for 2010?
   
5. Form W-7: Item 6b - Foreign tax ID no - what do I enter in this section - Canadian SIN?
   

Thank you

[JerryA 1]

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

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...!

[M&Pooh 12]

1. Read the instruction for the form 2555EZ. In a nutshell, under your circumstances if she was in Canada for less than 330 days last year, she can not exclude.

2. You can take either foreign tax deduction or foreign tax credit ( the latter is _generally_ more profitable ). So, on the federal level you'll avoid paying taxes twice, but on the state level - yes, you will be double-taxed.

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

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...!

[JerryA 1]

After reading the instructions for 2555EZ again, I find the bonafide residence test kinda confusing....!

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

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

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.