Taxes

[zyggy 9]

THe crux of the matter is whether or not you wish your alien spouse to be treated as a resident alien or non resident alien for tax purposes. If she has been here for longer than 6 months, she must be treated as a resident alien...

You always have the choice to elect to treat a non-resident alien spouse as a resident alien spouse for tax purposes. If you do so, you should file as married filing joint due to the significant tax bebefits of filing under that status.

If you opt to treat your alien spouse as a resident alien for the tax year 2006, you must report her worldwide income. You do not need to have proof of the amount of worldwide income, you only need to make a good faith effort of reporting it. You can exclude any foreign source income that was earned outside of the US by filing Form 2555 with your tax return. The maximum amount of the exclusion is $84,000 for 2006. The amount of the exclusion is reduced by the ratio of days she was in Russia as a resident there. As long as her foreign source income is below the exclusion amount (which is probably the case in Russia), then her income is subtracted from your Gross Income on Line 22 of the 1040. This means that your AGI would be the same with or without her, but you get the additional personal exemption as well as the higher standard exemption by filing as married filing joint...

Hi Zggy, I have been reading posts in this forum on taxes and I am unsure why I need to report my wife's foreign income. Here is my situation. My wife and I got married last July 14 2006. She is from Panama. She came into the country on May 17 2006. She does not have a SSN. We are doing the immigration process now. I understand the whole W-7 form for an ITN. I will file her as a resident alien. She meets the 183 days requirement. I plan on filing Married filing Jointly. But I don't understand why I need report her foreign income. There is no tax treaty between the US and Panama. Her income last year would have been $6,120. Panama does not collect taxes like the US. So can you explain to me why I would want to report her income on our tax return?

Thanks,

Mike

No one can give me advice on my question?

You file as married filing joint because it gives you the best tax advantages.... by far...

Report her $6,120 on Line 7 of your joint 1040...

Fill out Form 2555 and exclude the $6,120... so your AGI will be exactly the same as if she was never there...

But get the extra $3,300 personal exemption from your spouse and the larger $10,300 standard exemption for filling as married filing joint ($5,150 for married filing single) which will lower your taxable income and the amount of income taxes that the IRS wants... Remember, you MUST file as either MFS or MFJ...

Why give the government more money that what they deserve...

Edited March 12, 2007 by zyggy

[mthornto88 10]

THe crux of the matter is whether or not you wish your alien spouse to be treated as a resident alien or non resident alien for tax purposes. If she has been here for longer than 6 months, she must be treated as a resident alien...

You always have the choice to elect to treat a non-resident alien spouse as a resident alien spouse for tax purposes. If you do so, you should file as married filing joint due to the significant tax bebefits of filing under that status.

If you opt to treat your alien spouse as a resident alien for the tax year 2006, you must report her worldwide income. You do not need to have proof of the amount of worldwide income, you only need to make a good faith effort of reporting it. You can exclude any foreign source income that was earned outside of the US by filing Form 2555 with your tax return. The maximum amount of the exclusion is $84,000 for 2006. The amount of the exclusion is reduced by the ratio of days she was in Russia as a resident there. As long as her foreign source income is below the exclusion amount (which is probably the case in Russia), then her income is subtracted from your Gross Income on Line 22 of the 1040. This means that your AGI would be the same with or without her, but you get the additional personal exemption as well as the higher standard exemption by filing as married filing joint...

Hi Zggy, I have been reading posts in this forum on taxes and I am unsure why I need to report my wife's foreign income. Here is my situation. My wife and I got married last July 14 2006. She is from Panama. She came into the country on May 17 2006. She does not have a SSN. We are doing the immigration process now. I understand the whole W-7 form for an ITN. I will file her as a resident alien. She meets the 183 days requirement. I plan on filing Married filing Jointly. But I don't understand why I need report her foreign income. There is no tax treaty between the US and Panama. Her income last year would have been $6,120. Panama does not collect taxes like the US. So can you explain to me why I would want to report her income on our tax return?

Thanks,

Mike

No one can give me advice on my question?

You file as married filing joint because it gives you the best tax advantages.... by far...

Report her $6,120 on Line 7 of your joint 1040...

Fill out Form 2555 and exclude the $6,120... so your AGI will be exactly the same as if she was never there...

But get the extra $3,300 personal exemption from your spouse and the larger $10,300 standard exemption for filling as married filing joint ($5,150 for married filing single) which will lower your taxable income and the amount of income taxes that the IRS wants... Remember, you MUST file as either MFS or MFJ...

Why give the government more money that what they deserve...

zyggy, thanks for your help. I appreciate it. This board is great.