Tax credit that's more available to MFJ filers

[Russ&Caro 1,549]

There are many topics here at VisaJourney discussing the tax advantages of choosing a Married Filing Jointly (MFJ) status when submitting your Federal tax return. Choosing MFJ status could end up saving you over $1,000 in taxes. For information on whether you're qualified for MFJ, simply search the former topics.

In brief, even if your spouse is still living abroad while you are waiting for your CR-1/IR-1 application to be approved, you still probably qualify for MFJ status.

This post, however, is about something else...

When you do your taxes this year, for 2015, make sure you fully investigate if you qualify for the tax credit defined for form 8880 - Credit for Qualified Retirement Savings Contributions

If you contribute to a 401(k), an IRA, a corporate or government qualified pension, then you may very well qualify for this tax credit which could save you about $200 to $1,000 on your taxes. If you've been contributing to a retirement account and have never heard of this credit, it's probably because you've been filing as Single. The threshold for a Single filer qualifying for this credit is around $30,000 of taxable income. If you make more than this, you don't qualify.

The catch here is that as soon as you file MFJ, the threshold rises to $61,000. If your taxable income is under $61k, and you contribute to a retirement account, then you should definitely go through the form 8880 exercise.

You see? There are advantages to being married.

[Frankjavir 55]

There are many topics here at VisaJourney discussing the tax advantages of choosing a Married Filing Jointly (MFJ) status when submitting your Federal tax return. Choosing MFJ status could end up saving you over $1,000 in taxes. For information on whether you're qualified for MFJ, simply search the former topics.

In brief, even if your spouse is still living abroad while you are waiting for your CR-1/IR-1 application to be approved, you still probably qualify for MFJ status.

This post, however, is about something else...

When you do your taxes this year, for 2015, make sure you fully investigate if you qualify for the tax credit defined for form 8880 - Credit for Qualified Retirement Savings Contributions

If you contribute to a 401(k), an IRA, a corporate or government qualified pension, then you may very well qualify for this tax credit which could save you about $200 to $1,000 on your taxes. If you've been contributing to a retirement account and have never heard of this credit, it's probably because you've been filing as Single. The threshold for a Single filer qualifying for this credit is around $30,000 of taxable income. If you make more than this, you don't qualify.

The catch here is that as soon as you file MFJ, the threshold rises to $61,000. If your taxable income is under $61k, and you contribute to a retirement account, then you should definitely go through the form 8880 exercise.

You see? There are advantages to being married.

But the ITIN still needed for MFJ right?

in other words there is no way to file MFJ without SSN or ITIN.

[Russ&Caro 1,549]

My understanding is that you can file MFJ without SSN or ITIN, but the IRS will process it as MFS. This will usually yield a lower refund than if it's processed as MFJ. Once you receive an SSN or ITIN, you can submit an amended return and the IRS will process it as MFJ and send the net balance refund btwn MFJ and MFS.

Others on this forum claim you can submit the return as MFJ along with ITIN application and you will be processed as MFJ and receive an ITIN at the same time. But I spoke directly with an IRS representative who stated my spouse was not eligible for an ITIN, only an SSN.

The other approach is to file an extension and then file the return once you receive the SSN.

[Frankjavir 55]

Hi Russ,

I did find something interesting on 2015 Pub 17 for MFS with NRA spouse ans still getting the spouse exemption. I am taking advantage of it.

http://www.visajourney.com/forums/topic/583970-case-complete-to-interview-march-2016/?p=7996153

[Nich-Nick 3,354]

My understanding is that you can file MFJ without SSN or ITIN, but the IRS will process it as MFS. This will usually yield a lower refund than if it's processed as MFJ. Once you receive an SSN or ITIN, you can submit an amended return and the IRS will process it as MFJ and send the net balance refund btwn MFJ and MFS.

Others on this forum claim you can submit the return as MFJ along with ITIN application and you will be processed as MFJ and receive an ITIN at the same time. But I spoke directly with an IRS representative who stated my spouse was not eligible for an ITIN, only an SSN.

The other approach is to file an extension and then file the return once you receive the SSN.

Russ--

You can get an ITIN for your wife. The agent you spoke to was wrong.

See on this page https://www.irs.gov/Individuals/General-ITIN-Information

Who needs an ITIN?

IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for a SSN who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty needs an ITIN.

Other examples of individuals who need ITINs include:

A nonresident alien required to file a U.S. tax return

A U.S. resident alien (based on days present in the United States) filing a U.S. tax return

A dependent or spouse of a U.S. citizen/resident alien

A dependent or spouse of a nonresident alien visa holder

But obtaining one is not as simple as filling out a form. Very strict documentation from your wife must accompany the application. Example is her actual passport, not just a photocopy.

So the combined filing/ITIN application goes like this--

Complete joint tax return, leaving her SSN entry blank

Mail to her to sign.

She mails back the signed tax return and signed W7 application for ITIN and her identity proof

You mail all of it to an IRS address in Austin, TX

They process the ITIN first, write it in on your tax return, then your tax return goes to processing.

You can go to an IRS Taxpayer Assistance Center and have her passport verified and given back to you so it doesn't have to be mailed off to Austin. There are also various places abroad who can certify her ID document so she doesn't have to mail it to you. Some are private acceptance agents, or an embassy...it varies by country so what one person posts may not be true for her country.

Here's a page discussing acceptance agents abroad if anyone wants to research it https://www.irs.gov/Individuals/Acceptance-Agent-Program