spouses's income abroad

[lubnajavid 20]

Hello,

I was at work, so I couldn't answer. I used turbo tax. I purchased it in the store. I figure If i'm going to do my own taxes i want to make sure I have the best. I never used the free version, but I don't mind paying 54.00 for the store bought version. All I can say is, I wish I found Turbo Tax sooner, it was a breeze. You can do your taxes MFJ, MFS or single and see which one is the best. Only thing that sucks is you have to print it out and mail it in if filing MFJ. But I feel it's worth it.

Matt

That's correct.

agreed - buying turbotax is what i have done as long as its been around. In the past though it was easy to just use the online and then pay and then e-file, but i have a feeling that the online version probably wont have all the forms - not sure why - you'd think they would have everything...but i think i read either here on VJ or on the turbotax website that they dont have some like the 2555...

Thanks for the info though.

Another reason why i would have liked to have done the online - is that you can archive your returns for furture retrieval. Very useful.

On a side note - i received my transcripts from the IRS this week for the past 3 years - funny i guess i was expecting more! Its literally one page per year!

[LoveTurtle 2]

I'm sorry, are you asking how can you convince him? Once you're married, you have to file married, either seperatly or jointly. Others have said they filed single and chosen to amend it later, but I don't believe in taking chances. Even if you are married for one day you can file married which would cover the entire year. The exemption with filing jointly is usually pretty substantial. I'm getting back double what i would have gotten if I filed single or seperatly. Wait til you're married and grab a turbo tax or go to a tax professional who knows how to file taxes the right way. Many people on here come back saying a tax expert told them they had to file single since their spouse wasn't here. Lie. Good luck.

Matt

I didn't mean "how could I convince him", but just needed to know how it could be concerning to me because I would be the alien spouse living abroad by the time when he would do his tax return for 2012.

The main point is: Would I pay tax in US over my income that I receive in Brazil from a military lifetime pension just because my husband would do his tax there as MFJ?

I ask that because i already pay tax for my federal pension here in Brazil and it would not be funny if I should have to pay for that in US too.

I will declare my income on the affidavit of support form for my interview because I will need to complete my husband income for that. Would it mean that I would pay tax in US for that money which source is the Brazilian Government?

[Matt1968 13]

agreed - buying turbotax is what i have done as long as its been around. In the past though it was easy to just use the online and then pay and then e-file, but i have a feeling that the online version probably wont have all the forms - not sure why - you'd think they would have everything...but i think i read either here on VJ or on the turbotax website that they dont have some like the 2555...

Thanks for the info though.

Another reason why i would have liked to have done the online - is that you can archive your returns for furture retrieval. Very useful.

On a side note - i received my transcripts from the IRS this week for the past 3 years - funny i guess i was expecting more! Its literally one page per year!

The store bought turbo tax deluxe fills the form 2555 for you automatically. It did it for me, that's how I know. I dont' know about the free version, but the deluxe has it. You have to kind of navigate your way to it when doing your exemptions but it's there. The form 2555ez is what's not there.

Matt

[yachachiq12 43]

I didn't mean "how could I convince him", but just needed to know how it could be concerning to me because I would be the alien spouse living abroad by the time when he would do his tax return for 2012.

The main point is: Would I pay tax in US over my income that I receive in Brazil from a military lifetime pension just because my husband would do his tax there as MFJ?

I ask that because i already pay tax for my federal pension here in Brazil and it would not be funny if I should have to pay for that in US too.

I will declare my income on the affidavit of support form for my interview because I will need to complete my husband income for that. Would it mean that I would pay tax in US for that money which source is the Brazilian Government?

As stated earlier in the thread, foreign-earned income while residing abroad is only taxed after a certain amount (somewhere around $90,000 currently). No matter how much you earn, it must be reported, but it may not be subject to taxation if it is under the $92K or so minimum.

You need to do some research around the IRS website to get info on your specifics or speak to an experienced tax professional.

Here's one place to start: http://www.irs.gov/businesses/article/0,,id=182017,00.html

Another: http://www.irs.gov/newsroom/article/0,,id=108276,00.html

[rkk1 34]

Sorry if I missed this further up the thread, but you did indeed do a practice calculation to be sure that you really would save significantly more by doing MFJ, right? I remember you saying in another thread that you are/were recently a student, so if you aren't making that much and therefore not paying much in taxes anyway, you may not get much more money by doing MFJ. When we had our first year of taxes together and I was making little as a student and he was earning in Peru, there was zero difference for us between MFJ and MFS.

I am not sure how to calculate the difference between MFJ and MFS. I currently make about $40k a year, and I'm a full-time student as well. My tuition is ridiculous (over $50k per year as it is a professional degree program) and is more than I make per year, so technically I make a negative earning, but for tax purposes and purposes of filing documentation of support for the visa, I think they simply look at the $40k. Because my tuition is so high, I currently get about $2k returned to me in tax deductions. However, I had read somewhere onlline that if filing MFS, I would no longer be eligible for the $2k tax deduction as I would if MFJ. Although I don't know if this is true or not, it seems that at least there is upward of $2,000 difference between the two if not more for me.

Also, this is personal and maybe not welcome but tell your husband that a larger tax refund for you is a larger tax refund for you both as a couple. You are married, right? It's a partnership and he can't hold this over you as if it were a favor to an acquaintance. I apologize if I'm out of line...

I could start a whole nother thread on this topic (and maybe I will), but you have a good point. I'm not sure if I should derail my thread by posting all this, but it's true that right now my husband and I still think of our finances as being somewhat separate. Whenever I go to India, he is a total gentleman and pays all my expenses while there, but he still lives at home with his family (as is typical in Indian culture for adult children, and males even live with their families after marriage). So right now his finances are mingled with his parents and sibling rather than with mine. I anticipate that after he moves in with me in the US, then his perception will continue to shift and he will see me more and more as his primary family unit as his primarily role would be a husband, but up until now his primarily role is that of a son. Thus far, neither of us tells each other how to spend our own money (as we are more like singles in this aspect as we are living separately), but I expect that after we live together then we will both have far more to say about how each other spends our family income.So I expect that after we live together that whole 'my money' vs 'your money' attitude to shift into 'our money'.

On my end, I may have also perpetuated this 'separate' attitude between us, but maybe that was somewhat deliberate. For instance, before my last trip to India (this month), my husband had promised me to reimburse me a portion of my ticket price. Before leaving, he wanted me to buy a bunch of gifts for him and his family and extended family, which I was not happy about doing (especially as all the things he wanted were available in India, but for a greater price than in the US). We started squabbling over this issue of bringing gifts for the relatives (as I didn't see the point, as my family had already given his family token gifts at the wedding a few months prior. Furthermore, I was financially strapped, as I had spent so much money already on my plane ticket and his visa stuff). But my husband was really insistent on the idea that I bring things for them (as he even told me that he'd reimburse me for all I spent, as he simply wanted me to bring US gadgets there - cell phones, cameras, etc). I finally got tired of arguing with him, and just bought the stuff, as he told me he'd pay me back. I reminded him of the cost involved as I knew he didn't have so much free cash available, but he told me not to worry about it. However, right before I came to India, the reality of the expenses started to sink in as he owed me around $1,000 ($500+ for the items, and the other $400 for the flight). He started backpedalling, asking me how much money I'd lose (in restocking fees) if I returned the things I'd ordered online on his behalf. Within a few days of my arrival, he decided he didn't want the items anymore (actually he DID want them but forgot that he had offered to reimburse me a portion of the plane ticket, and thus not having enough money for both). Luckily he was able to give the items to his relatives, and with the money they offered him, as well as his own money, he was able to pay me back fully.

It might seem silly to some for me to hold my husband accountable for paying me back, as we are married. However, I find it necessary, as it is the only way to help him take responsibility for his actions. He still has to mature a bit in this area. Although I've paid the first installment for the visa, I've asked him to pay the 2nd half. Unless I ask him to shoulder the burden of sharing the expense with me, I don't think he'll fully value it. When he also has to pick up the slack (rather than just me) then he is more conscious and less impulsive. So I think that my being firm about this sort of thing will only help to make him more mature and responsible... and transition more into being a husband rather than his parents' child. He's in his late 20s now; it's time. He's a wonderful person and a nice companion to me, but this is an issue we still have to work towards.

Changing subject: About documenting his foreign income, keep documentation if you have it. If it isn't available, make a little spreadsheet yourselves and file it away in case you're ever audited.

I will have to ask him what kind of documentation he has, as I don't know what kinds of tax documents are submitted in India.

Thanks!

Edited March 11, 2012 by rkk1

[yachachiq12 43]

I am not sure how to calculate the difference between MFJ and MFS. I currently make about $40k a year, and I'm a full-time student as well. My tuition is ridiculous (over $50k per year as it is a professional degree program) and is more than I make per year, so technically I make a negative earning, but for tax purposes and purposes of filing documentation of support for the visa, I think they simply look at the $40k. Because my tuition is so high, I currently get about $2k returned to me in tax deductions. However, I had read somewhere onlline that if filing MFS, I would no longer be eligible for the $2k tax deduction as I would if MFJ. Although I don't know if this is true or not, it seems that at least there is upward of $2,000 difference between the two if not more for me.

No one here can really tell you which would be higher because taxes are complex and it depends on how much you already paid into federal income taxes (if you have an irregular pay schedule, this can be way off relative to what is actually owed). If I were you, I would either have your accountant run the numbers or go to the IRS site yourself and do a pretend filing with the 1040 (forget the residency and SSN issues, just run the numbers on your income). Grab your W-2(s), any 1099s and your educational tax info and whatever else is pertinent and run the numbers. Here's the form:

http://www.irs.gov/pub/irs-pdf/f1040.pdf

Chances are that the outcome is better filing MFJ, but go ahead and check before asking your spouse to do all that work. It sounds like you don't do your own taxes, but you'd be amazed at how easy and quick it is to run the numbers in many cases. And if you're making it through medical school (I think), this should not be above your head by any means.

[rkk1 34]

Chances are that the outcome is better filing MFJ, but go ahead and check before asking your spouse to do all that work. It sounds like you don't do your own taxes, but you'd be amazed at how easy and quick it is to run the numbers in many cases. And if you're making it through medical school (I think), this should not be above your head by any means.

I confess... you got me there. I have earned my income for many years through employment in my family's business, so my dad has always taken my tax forms to our family accountant at the same time that he gets his own taxes done. So I have only had to sign the paperwork thus far, as the accountant always did the rest. Now that I'm married and trying to get my husband's visa paperwork, I'm taking an active role in learning about what I need to do to file these taxes so that the visa application doesn't get screwed up. I admit I don't know much (haven't ever tried Turbotax), so this is all new info to me. But it's good to finally learn what I should be knowing.

[neoflasher 3]

disregard

Edited March 11, 2012 by neoflasher

[Matt1968 13]

I confess... you got me there. I have earned my income for many years through employment in my family's business, so my dad has always taken my tax forms to our family accountant at the same time that he gets his own taxes done. So I have only had to sign the paperwork thus far, as the accountant always did the rest. Now that I'm married and trying to get my husband's visa paperwork, I'm taking an active role in learning about what I need to do to file these taxes so that the visa application doesn't get screwed up. I admit I don't know much (haven't ever tried Turbotax), so this is all new info to me. But it's good to finally learn what I should be knowing.

What many have done here(myself included) is use Turbo tax to test how much you would receive. The thing with Turbo tax is that you can just plug in the numbers yourself and see what the outcome would be. When I used it, I tested it on MFJ, MFS, and single as well just to see the numbers. You can do this just to get an idea what it would be each way, and depending which way is more money then you can make your choice and file. It really is pretty simple if you wanted to try filing on your own. I used h/r block or other people for years, but i wanted to try it on my own. Just like you it was different this year because i got married and my spouse is overseas. Good luck.

Matt

[andy desai 3]

IRS has a lot of other fish to catch,

However you do have the right thought process

1) Husband is correct - US Tax laws dont apply to him yet

2) Income from india is too small to worry about

3) You should file married filing jointly to get the maximum refund

4) India and US has a tax treaty, If the income in india is arised from wages, salaries or tips - income is already taxed in india and it is repatriated from US tax structure. This is done to avoid tax duplication.

5) Income is only taxed for the portion above the 91K threshold.

6) You should file MFJ to serve as proof for your immigration paperwork and avoid confusion

hopefully this helps

[JudyKCski 12]

Yup, you're right about the deductions. It makes a big difference.

As for notarization, it has to be someone who can verify the legitimacy of the document, which means even many notaries in the US can't do it because they can only swear to the veracity of a signature on a document, not the document itself. In our case, my tax preparer was able to verify the passport because they have been designated an "agent of acceptance" (or something like that) by the IRS. So basically I'm saying it can't just be any notary.

To the above quote - so they won't accept a notarized copy? How come they (IRS) is making this so difficult?

Is there any entity in the US that can certify the document (passport) besides going to H&R block?

[alizon 77]

To the above quote - so they won't accept a notarized copy? How come they (IRS) is making this so difficult?

Is there any entity in the US that can certify the document (passport) besides going to H&R block?

Well, the notary I went to first told me that it's actually state laws that make this difficult, not the IRS. State law dictates what powers notaries have in that state, and many states (including Illinois, which is where I am) only allow notaries to swear that they witnessed a signature. It makes sense if you think about it: notaries aren't trained to recognize a fake passport or birth certificate from every country on the planet, so they can't swear that a foreign document is real (not that the tax preparers are trained to do this either, but I guess the state allows them to take on the risk of being wrong). The IRS needs someone who can swear to the fact that the passport is real, but many state notaries simply aren't allowed to do that.

I don't know who else to go to other than a big tax preparer because that's what I did, and I didn't investigate any other options. I'm sure other tax preparation services can do the same thing, and I bet you could ask them to just accept the passport as real and then do your taxes yourself. In fact, if I had to do this all over again, that is what I would do because I had such a hard time getting the preparer to actually do my taxes correctly!

Edited March 11, 2012 by alizon

[Matt1968 13]

Well, the notary I went to first told me that it's actually state laws that make this difficult, not the IRS. State law dictates what powers notaries have in that state, and many states (including Illinois, which is where I am) only allow notaries to swear that they witnessed a signature. It makes sense if you think about it: notaries aren't trained to recognize a fake passport or birth certificate from every country on the planet, so they can't swear that a foreign document is real (not that the tax preparers are trained to do this either, but I guess the state allows them to take on the risk of being wrong). The IRS needs someone who can swear to the fact that the passport is real, but many state notaries simply aren't allowed to do that.

I don't know who else to go to other than a big tax preparer because that's what I did, and I didn't investigate any other options. I'm sure other tax preparation services can do the same thing, and I bet you could ask them to just accept the passport as real and then do your taxes yourself. In fact, if I had to do this all over again, that is what I would do because I had such a hard time getting the preparer to actually do my taxes correctly!

I brought back my wife's passport back to the states with me to show with the copy to have it notarized. When i told them what i wanted they looked at me like I had two heads, and at first didn't want to do it. After some back and forth, they finally did it. I guess it matters where you go to get it done.

Matt

Edited March 11, 2012 by Matt1968

[lubnajavid 20]

I brought back my wife's passport back to the states with me to show with the copy to have it notarized. When i told them what i wanted they looked at me like I had two heads, and at first didn't want to do it. After some back and forth, they finally did it. I guess it matters where you go to get it done.

Matt

if you have the original documents - make a trip to your local tax office and ask them to verify and copy the originals as part of the w-7 filing. They are more than happy to do that...THAT problem solved.

[Matt1968 13]

if you have the original documents - make a trip to your local tax office and ask them to verify and copy the originals as part of the w-7 filing. They are more than happy to do that...THAT problem solved.

That sounds like a great option, to bad nobody mentioned it when I did mine over a month ago..lol