Question on US Income Taxes during K3 Process.

[sly_wolf 199]

I was wondering if anyone knows the answers to the following:

Lets say we were to get married in August of this year and then file for a K3 visa. What is the impact to my US girlfiend's income tax for 2007 assuming that the K3 is still pending and in process? Does she report as being married on her income tax? How would my income as a Canadian and living in Canada affect her income tax? Also will I have to do a US income tax for 2007 even though the K3 was still in pending?

Thanks

Sly

[Yodrak 7]

Sly,

In the situation you describe, your girlfriend (not fiancee?) would file as 'married' on her 2007 tax return. Unless you earn somewhat in excess of US$82,400 (the 2006 number) in 2007, you would probably want to declare yourself a US taxpayer and report your Canadian income with hers on a joint return - this will cause her income to be taxed at a lower rate plus she can use your deduction, while your income will be excluded from taxation because it is foreign earned.

See IRS Publications 54 and 519 and Forms 2555 and 2555-EZ, and consult with a tax professional if you need further explanation.

Yodrak

I was wondering if anyone knows the answers to the following:

Lets say we were to get married in August of this year and then file for a K3 visa. What is the impact to my US girlfiend's income tax for 2007 assuming that the K3 is still pending and in process? Does she report as being married on her income tax? How would my income as a Canadian and living in Canada affect her income tax? Also will I have to do a US income tax for 2007 even though the K3 was still in pending?

Thanks

Sly

[sly_wolf 199]

Yes girlfriend was a poor choice of words.

My fiance as such has a very modest income and also has 2 dependent children, but I assume, by what you said, that I will have to file 2 income tax returns for 2007 .... one for the US and one for Canada?? I also assume you mean my gross income under Canada? My gross income does fall under that amount especially if I consider the fact that I live on less than half the amount due to spousal/child support obligations from a previous failed marriage in Canada.

Sly

[Yodrak 7]

Sly,

Calculate her taxes both ways - married-single or married-joint - and find out which way results in the lowest US tax burden.

Yodrak

Yes girlfriend was a poor choice of words.

My fiance as such has a very modest income and also has 2 dependent children, but I assume, by what you said, that I will have to file 2 income tax returns for 2007 .... one for the US and one for Canada?? I also assume you mean my gross income under Canada? My gross income does fall under that amount especially if I consider the fact that I live on less than half the amount due to spousal/child support obligations from a previous failed marriage in Canada.

Sly

[tom&tata 2]

Yes girlfriend was a poor choice of words.

My fiance as such has a very modest income and also has 2 dependent children, but I assume, by what you said, that I will have to file 2 income tax returns for 2007 .... one for the US and one for Canada?? I also assume you mean my gross income under Canada? My gross income does fall under that amount especially if I consider the fact that I live on less than half the amount due to spousal/child support obligations from a previous failed marriage in Canada.

Sly

You will file 2 income tax returns - if you choose - 1 in Canada and 1 in US jointly with your fiance (will be wife). In your US income tax return, you have the option of excluding the Canadian income if the amount is below threshold mentioned by Yodrak.

Edited January 12, 2007 by tom&tata

[zyggy 9]

This will also require you making a statement that you choose to be treated as a resident alien for tax purposes and your filing a W-7 with the tax return. The tax return would then be sent to the International Tax Office in Philadelphia...

[doodlebug 3]

If she's a single mom I"m assuming she files head of household normally. If that is the case and you haven't lived there for the majority of 2007 then she can still file head of household.

[zyggy 9]

If she's a single mom I"m assuming she files head of household normally. If that is the case and you haven't lived there for the majority of 2007 then she can still file head of household.

This is correct, she can be considered unmarried for purposes of claiming head of household... but in most cases taking the larger standard deduction and the additonal personal exemption by electing being treated as a resident alien for the entire tax year is usually more advantageous...

From Publication 17

Nonresident alien spouse. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. However, your spouse is not a qualifying person for head of household purposes. You must have another qualifying person and meet the other tests to be eligible to file as a head of household.

Edited January 12, 2007 by zyggy