How to file taxes with spouse and pending CR-1 Visa

[Millikkl 15]

16 minutes ago, missileman said:

That is exactly what we do.......my wife pulls the data from her foreign accounts and investments...which I add to a spreadsheet we send to our tax pro.  We then use the IRS average exchange rate as prescribed to convert the totals to USD.

Do you make

16 minutes ago, missileman said:

That is exactly what we do.......my wife pulls the data from her foreign accounts and investments...which I add to a spreadsheet we send to our tax pro.  We then use the IRS average exchange rate as prescribed to convert the totals to USD.

Do you make the appointment with ACS at the embassy under the spouse’s name and info since it’s their passport being copied or me as the US citizen?

[Millikkl 15]

2 hours ago, missileman said:

That is exactly what we do.......my wife pulls the data from her foreign accounts and investments...which I add to a spreadsheet we send to our tax pro.  We then use the IRS average exchange rate as prescribed to convert the totals to USD.

The majority of my spouses income is cash based since he is a musician and they often just pay them cash, even for government contracts. Would we just estimate His income? Is there risk of being audited? I remember reading somewhere that up to a certain amount, the spouses worldwide income isn’t taxed. Is that correct? 

[Crazy Cat 41,845]

35 minutes ago, Millikkl said:

The majority of my spouses income is cash based since he is a musician and they often just pay them cash, even for government contracts. Would we just estimate His income? Is there risk of being audited? I remember reading somewhere that up to a certain amount, the spouses worldwide income isn’t taxed. Is that correct? 

I am neither an attorney nor a tax professional. 

1.  I would list his income as accurately as possible.

2.  There is always a chance of being audited, imo.  But I believe the chance is not great at all.

3.  It depends upon how he you both file.  In some cases, it is beneficial to file separately.  In many cases, it is beneficial to file jointly.  There are a lot of factors.  Tax treaties with the US, amount of income he earned, and other things play a part (See next paragraph).  Personally, I suggest people consult a competent tax pro who is knowledgeable in this area in order to "run the numbers" in different scenarios to calculate the lowest tax liability.  

4.  Some or all of foreign spouse's income could possibly be excluded (several factors to consider) by using the Form 2555 if allowed.

 

I know my answers seem generic and are probably not helpful, but there are numerous factors to consider in some cases.  I can tell you what worked for us.  My wife entered the US in late June, 2017.  She has foreign income in the form of a retirement pension and other dividends.  Taiwan does not have a tax treaty/agreement with the US, thus she was not able to utilize the Form 2555 for foreign income exclusion.  Under the advice of our tax accountant, she (my wife) filed as a dual status alien (tax resident) for that tax year.  Thus, she filed as a non-resident for tax purposes for the part of 2017 that she was not present in the US.  She filed as a resident for tax purposes from the time she arrived until the end of the tax year.  By doing so, she was required to report only her US based income. So we both filed "Married-Filing Separately".  That was for 2017.  For 2018 and 2019, we have filed a joint return.  

 

Good luck.  US taxes questions are not always easy to answer....LOL

Edited February 7, 2020 by missileman

[Wuozopo 4,293]

1 hour ago, Millikkl said:

The majority of my spouses income is cash based since he is a musician and they often just pay them cash, even for government contracts. Would we just estimate His income? Is there risk of being audited? I remember reading somewhere that up to a certain amount, the spouses worldwide income isn’t taxed. Is that correct? 

Also not a tax professional and my US wife knows more than me and makes me do the taxes along with her to learn.

What we did my K1 year was I estimated my UK income based on looking at bank statements and recalling my pay grade. I brought no paperwork with me. I’m sure it was inaccurate but I did my best to report it.

 

She calculated two returns:

Married Filing Separately with me filing nothing because no US income.

Married Filing Jointly reporting my foreign income and using Form 2555.

The Joint return had less tax.

 

Yes you can be audited, but the chance is slim. My wife has done her own taxes for over 40 years. Zero audits. 
The red sliver in the graphic shows your chances.

[Millikkl 15]

22 hours ago, Wuozopo said:

Also not a tax professional and my US wife knows more than me and makes me do the taxes along with her to learn.

What we did my K1 year was I estimated my UK income based on looking at bank statements and recalling my pay grade. I brought no paperwork with me. I’m sure it was inaccurate but I did my best to report it.

 

She calculated two returns:

Married Filing Separately with me filing nothing because no US income.

Married Filing Jointly reporting my foreign income and using Form 2555.

The Joint return had less tax.

 

Yes you can be audited, but the chance is slim. My wife has done her own taxes for over 40 years. Zero audits. 
The red sliver in the graphic shows your chances.

Thanks for sending your personal experience over - it certainly makes the most sense to put in the effort to file jointly. My question regarding the W-7 - it asks for a mailing address for the applicant (my foreign spouse). Can I put my US mailing address even though he has never been in the US? I can put his foreign address in the next section, but he will not be able to receive mail there.

 

Anyone know best way to fill out W-7 when spouse has no address in US? Can I use mine?

[Katie & Camilo 23]

I have the same question regarding the mailing address section (line 2 on the W-7 form)! Also, does anyone know if my spouse is able to scan his certified copy of passport (for supporting document purposes) and email it to me? Our timing isn't going to work out for him to get the certified copy while I am there visiting before I head back to the US. Just not sure if IRS will accept a scanned and then printed version of the certified copy. 

 

Finally, can someone give me an example or their statement in which they made the choice to have their "nonresident alien spouse be treated as a resident for tax purposes"? Thanks!!

[Wuozopo 4,293]

23 minutes ago, Katie & Camilo said:

Finally, can someone give me an example or their statement in which they made the choice to have their "nonresident alien spouse be treated as a resident for tax purposes"? Thanks!!

 Mine is posted in this thread https://www.visajourney.com/forums/topic/729902-filing-our-first-taxs-after-k1/?do=findComment&comment=10022319

 

3 hours ago, Millikkl said:

Anyone know best way to fill out W-7 when spouse has no address in US? Can I use mine?

I refer you to the W7 instruction. Line by line starts on page 8

https://www.irs.gov/pub/irs-pdf/iw7.pdf

[Millikkl 15]

On 2/8/2020 at 8:18 PM, Wuozopo said:

 Mine is posted in this thread https://www.visajourney.com/forums/topic/729902-filing-our-first-taxs-after-k1/?do=findComment&comment=10022319

 

I refer you to the W7 instruction. Line by line starts on page 8

https://www.irs.gov/pub/irs-pdf/iw7.pdf

I decided to call around to some tax pros to get some advice before filing and am only getting more confused. I have heard the following:

 

1.W-7 form needs to have a certified signature on it or he needs to present in person. Is this true?

2. I need to file his ITIN separately from my tax return, wait for the number and then file taxes.

 

from what I understood before this, we just needed to get his passport certified by the embassy (which we did), have him complete the W-7 and then send those in with my tax return to the IRS.

 

am now being told by a couple different tax accountants that this isn’t correct, but it also seems like they’re not familiar with this process at all. 

 

 

 

[Wuozopo 4,293]

23 minutes ago, Millikkl said:

I decided to call around to some tax pros to get some advice before filing and am only getting more confused. I have heard the following:

 

1.W-7 form needs to have a certified signature on it or he needs to present in person. Is this true?

2. I need to file his ITIN separately from my tax return, wait for the number and then file taxes.

 

from what I understood before this, we just needed to get his passport certified by the embassy (which we did), have him complete the W-7 and then send those in with my tax return to the IRS.

 

am now being told by a couple different tax accountants that this isn’t correct, but it also seems like they’re not familiar with this process at all. 

 

Getting an ITIN and filing jointly with a spouse abroad comes with much hassle. File Married Filing Separately if it is too much trouble or costly. Your questions:
1. He is applying for the W7 so he must sign it unless he is physically incapacitated, deceased, or you have power of attorney for him which you must include with it. Way easier for him to fill out the W7, sign, and mail to you.

2. No, you file the W7 and tax return together. 
 

I am going to refer you to a thread where I have answered many things this morning starting with a list of what you send to Austin and who signs what.  Jump in here https://www.visajourney.com/forums/topic/732668-where-to-file-tax-with-w7/?do=findComment&comment=10068542