Married Filing Separately ($5 earning)

[juninho10 42]

Hi guys,

 

My wife and I are pulling our hair out trying to figure out the tax return. This is the situation...

 

My wife is a US citizen that earns about $10,000 a year living and working in Colombia. She has no US income. I understand that amount would put her under the threshold to file BUT I see married (2019) people must file if they earn over $5.

 

My question is this...

 

Does the $5 minimum only apply if the foreign spouse (me) is making money in the US? I'm in a genuine bind as all of the online sites are incredibly unfriendly to US citizens earning only in a foreign country, and spouses not having a SSN. I found 1040 to do the paper filing, but it says my wife has to accompany it with a W-2 form, which seems very US-income centric.

 

Any advice is greatly appreciated!

[TamMhmd 210]

 

 

I lived overseas and  I filed. It doesn't matter how much you make but you should always file. Then there is foreign income exclusion which I filed with my tax returns; which brought my income down to $0  - not paying any taxes. Each year the foreign income exclusion amount varies. For the 2019 tax year, the limit is $105,900; which you are under- thus not owing or paying anything in the US at all. But you should ALWAYS file your taxes for reporting purposes.

 

A W-2 is not required working outside the US because foreign companies don't have this;  but I used my pay stubs to create a total earnings spreadsheet which was used to fill out the 1040. You can also request a letter from the company of your full year's earnings. 

 

Edited May 12, 2020 by TamMhmd

[juninho10 42]

1 minute ago, TamMhmd said:

 

 

I lived overseas and  I filed. It doesn't matter how much you make but you should always file. Then there is foreign income exclusion which I filed with my tax returns; which brought my income down to $0  - not paying any taxes. Each year the foreign income exclusion amount varies. For the 2019 tax year, the limit is $105,900; which you are under- thus not owing or paying anything in the US at all. But you should ALWAYS file your taxes for reporting purposes.

 

A W-2 is not required working outside the US because foreign companies don't have this;  but I used my pay stubs to create a total earnings spreadsheet which was used to fill out the 1040. You can also request a letter from the company of your full year's earnings. 

 

Thanks so much! My wife will paper file 1040 and will ask her employer for a letter stating the full year's earnings. I'm looking for the foreign earned income exclusion form and came across 2555.

 

Was this the one you filed?

https://www.irs.gov/forms-pubs/about-form-2555

[TamMhmd 210]

Yep, that is the one! 

[juninho10 42]

3 minutes ago, TamMhmd said:

Yep, that is the one! 

You're a legend!

[Wuozopo 4,293]

4 hours ago, juninho10 said:

Does the $5 minimum only apply if the foreign spouse (me) is making money in the US? I'm in a genuine bind as all of the online sites are incredibly unfriendly to US citizens earning only in a foreign country, and spouses not having a SSN.

Since she is married and would file married filing separately because you have no SSN or ITIN, then she falls under that $5 threshold and should file.

 

In her situation, she has no W2 and the IRS does not require one,  nor any written proof of that foreign income.  I promise this is correct.
 

Her forms will include

 

FORM 1040

Top line Filing Status. 
Check the “Married filing separately” box at the top of Form 1040.  Enter her spouse’s name in the entry space below the filing status checkboxes by the little arrow. Do not enter spouse name lower down in the space below her name because that is only if you were a joint filer. If the spouse doesn’t have and isn’t required to have an SSN or ITIN, enter “NRA” in the banks for spouse SSN. That stands for nonresident alien.

 

The rest of this is assuming she has no investment income like dividends or interest earned maybe in the US. If she has any, then they will be entered in the appropriate places and would change the entries slightly that I am explaining below

Line 1 Wages

Enter her $10,000 or whatever she earned exactly.

 

Line 7a Other Income

will come from other forms, but it will say  -10,000 (put the minus sign)

Line 7b Total Income:  $0

 (Add line 1-7a as the directions say and you get zero unless she had investment income

Line 8b: $0

Line 9: $12, 200

Line 11a: $12, 200
Line 11b Taxable Income $0

Line 12a-17: $0

Line 19: $0

 

To be continued if you want guidance on Form 2555 or Schedule 1

 

 

 

 

 

 

[juninho10 42]

7 hours ago, Wuozopo said:

Since she is married and would file married filing separately because you have no SSN or ITIN, then she falls under that $5 threshold and should file.

 

In her situation, she has no W2 and the IRS does not require one,  nor any written proof of that foreign income.  I promise this is correct.
 

Her forms will include

 

FORM 1040

Top line Filing Status. 
Check the “Married filing separately” box at the top of Form 1040.  Enter her spouse’s name in the entry space below the filing status checkboxes by the little arrow. Do not enter spouse name lower down in the space below her name because that is only if you were a joint filer. If the spouse doesn’t have and isn’t required to have an SSN or ITIN, enter “NRA” in the banks for spouse SSN. That stands for nonresident alien.

 

The rest of this is assuming she has no investment income like dividends or interest earned maybe in the US. If she has any, then they will be entered in the appropriate places and would change the entries slightly that I am explaining below

Line 1 Wages

Enter her $10,000 or whatever she earned exactly.

 

Line 7a Other Income

will come from other forms, but it will say  -10,000 (put the minus sign)

Line 7b Total Income:  $0

 (Add line 1-7a as the directions say and you get zero unless she had investment income

Line 8b: $0

Line 9: $12, 200

Line 11a: $12, 200
Line 11b Taxable Income $0

Line 12a-17: $0

Line 19: $0

 

To be continued if you want guidance on Form 2555 or Schedule 1

 

 

 

 

 

 

Great info! Would love to hear about 2555 if that's the needed, accompanying form.

 

I just recalculated. It looks like she earns a little bit more than the threshold at around $12,500. It's hard to properly pinpoint as the Colombian Peso is so volatile! Would that affect how we fill-in 1040?

[Nitas_man 3,100]

On 5/12/2020 at 11:35 AM, juninho10 said:

Hi guys,

 

My wife and I are pulling our hair out trying to figure out the tax return. This is the situation...

 

My wife is a US citizen that earns about $10,000 a year living and working in Colombia. She has no US income. I understand that amount would put her under the threshold to file BUT I see married (2019) people must file if they earn over $5.

 

My question is this...

 

Does the $5 minimum only apply if the foreign spouse (me) is making money in the US? I'm in a genuine bind as all of the online sites are incredibly unfriendly to US citizens earning only in a foreign country, and spouses not having a SSN. I found 1040 to do the paper filing, but it says my wife has to accompany it with a W-2 form, which seems very US-income centric.

 

Any advice is greatly appreciated!

Why do you have to paper file?

 

File online

19 hours ago, juninho10 said:

Great info! Would love to hear about 2555 if that's the needed, accompanying form.

 

I just recalculated. It looks like she earns a little bit more than the threshold at around $12,500. It's hard to properly pinpoint as the Colombian Peso is so volatile! Would that affect how we fill-in 1040?

I converted foreign income using average exchange rates by month

[juninho10 42]

3 hours ago, Nitas_man said:

Why do you have to paper file?

 

File online

I converted foreign income using average exchange rates by month

We tried TurboTax and H&R Block, and both seemed really unfriendly to people in our position. One of them was pushing for W-2 income info, which my spouse doesn't have - it's all foreign income. They also pestered her to fill-in a SSN number for me. On paper, I can write NRA (non-resident alien) in that gap, but it wouldn't accept an answer on the online ones we tried.

 

Do you know of any sites that are smoother than those 2 for those in more 'unique' situations?

[Tesco 70]

I have filed MFS using TaxAct. It had something there saying; my spouse is an NRA and doesn't have an ITIN. Able to file online no problem then. When listed foreign income, this was on the miscellaneous section I think... While ago now. It will generate a 1099 for any U.K. ISA/bank income.

[Wuozopo 4,293]

15 hours ago, juninho10 said:

We tried TurboTax and H&R Block, and both seemed really unfriendly to people in our position. One of them was pushing for W-2 income info, which my spouse doesn't have - it's all foreign income. They also pestered her to fill-in a SSN number for me. On paper, I can write NRA (non-resident alien) in that gap, but it wouldn't accept an answer on the online ones we tried.

 

Do you know of any sites that are smoother than those 2 for those in more 'unique' situations?

TurboTax works fine. My wife has done at least one tax return with foreign income (for somebody else) for the last 10 years. You probably don’t have any background in US taxes to know what answers to give maybe. Foreign income is entered under “less common income” which is the last section of income in TurboTax. We download the software and install rather than use the online.  
 

I’ve also done a return with foreign income using H&R software, but found it more awkward. Each software collects data in different ways to fill in the forms. When I used HR, it did not have a specific foreign income section and wanted to create a “pretend W2” Also both they will pester you to upgrade or buy audit protection.  It’s a sales pitch. 
 

You can not efile because you have no SSN.  You can leave SSN blank, ignoring the TurboTax pestering. Then when finished and the only error you get is for the SSN, print the return for mailing and write in NRA for your SSN.  There is a specific address for mailing when filing with a Form 2555. It is in Austin, Texas. 

Edited May 14, 2020 by Wuozopo

[juninho10 42]

22 minutes ago, Wuozopo said:

TurboTax works fine. My wife has done at least one tax return with foreign income (for somebody else) for the last 10 years. You probably don’t have any background in US taxes to know what answers to give maybe. Foreign income is entered under “less common income” which is the last section of income in TurboTax. We download the software and install rather than use the online.  
 

I’ve also done a return with foreign income using H&R software, but found it more awkward. Each software collects data in different ways to fill in the forms. When I used HR, it did not have a specific foreign income section and wanted to create a “pretend W2” Also both they will pester you to upgrade or buy audit protection.  It’s a sales pitch. 
 

You can not efile because you have no SSN.  You can leave SSN blank, ignoring the TurboTax pestering. Then when finished and the only error you get is for the SSN, print the return for mailing and write in NRA for your SSN.  There is a specific address for mailing when filing with a Form 2555. It is in Austin, Texas. 

Thanks, guys.

 

Looks like the free desktop version of TurboTax is 1040 only, and not 2555.

 

I will paper-file 1040 and 2555 and send it to Austin, TX.

Edited May 14, 2020 by juninho10

[Wuozopo 4,293]

3 minutes ago, juninho10 said:

Thanks, guys.

 

I'll try to download TurboTax and will print it from that. Does my wife also need to send a 1040 along with that, or is 2555 enough? If so, is that also sent to Austin, TX? I looked online and it shows that it has to be sent to Utah.

At minimum

1040

Schedule 1

Form 2555 (if she qualifies)

 

There could be more forms if she earns any interest. 

 

[juninho10 42]

2 minutes ago, Wuozopo said:

At minimum

1040

Schedule 1

Form 2555 (if she qualifies)

 

There could be more forms if she earns any interest. 

 

Great. 1040 was straight forward. The paper 2555 looks a bit trickier but I'll have a proper look at it.

 

Is this the Schedule 1 you're referring to?

 

https://www.irs.gov/pub/irs-pdf/f1040s1.pdf

 

I can't get my head round which bits she'd need to fill-out besides name and SSN. Mentions of virtual currency, alimony, unemployment consultation, health savings, retirement etc. None of that applies.

[Wuozopo 4,293]

12 minutes ago, juninho10 said:

Great. 1040 was straight forward. The paper 2555 looks a bit trickier but I'll have a proper look at it.

 

Is this the Schedule 1 you're referring to?

 

https://www.irs.gov/pub/irs-pdf/f1040s1.pdf

 

I can't get my head round which bits she'd need to fill-out besides name and SSN. Mentions of virtual currency, alimony, unemployment consultation, health savings, retirement etc. None of that applies.

I think you are totally lost.  You can’t piecemeal part free TurboTax and part fill in your own form. The forms interact where what you put on 2555 goes to Schedule 1, goes to 1040.

Edited May 14, 2020 by Wuozopo