Easy Question For Ya - Tax

[Jpoy 2]

Hi!

 

I just have a pretty simple question for ya and thank you in advance for answering it! 

 

Quick story..... I got married to my girlfriend this past Feb 2020. Before we  got married this past Feb 2020, I filed my taxes beforehand (Jan 2020) as 'single'. She currently lives & works in Dubai, but she's a Filipino citizen. I know that tax season is quite ways to go, but I'd like to jump on this concern immediately and start asking questions. Now my question is should I file my taxes next year as MARRIED/SEPARATELY or MARRIED/JOINTLY? What are the PROS/CONS of both?

 

Thanks!

 

*More questions to follow* 

[JeanneAdil 6,592]

I did as it allows for a bigger deduction and return 

and file the 2555 for any money she earned abroad as that allows a max $105,000 deduction of her income/ only hers nothing earned in the US for u

If she is still abroad at tax time, file a W7 following the IRS instructions for "non resident alien spouse"

[Vermyndax 33]

1 hour ago, Jpoy said:

Hi!

 

I just have a pretty simple question for ya and thank you in advance for answering it! 

 

Quick story..... I got married to my girlfriend this past Feb 2020. Before we  got married this past Feb 2020, I filed my taxes beforehand (Jan 2020) as 'single'. She currently lives & works in Dubai, but she's a Filipino citizen. I know that tax season is quite ways to go, but I'd like to jump on this concern immediately and start asking questions. Now my question is should I file my taxes next year as MARRIED/SEPARATELY or MARRIED/JOINTLY? What are the PROS/CONS of both?

 

Thanks!

 

*More questions to follow* 

If you are married, you must file as married, no exceptions (although head of household is a possibility). You cannot file single. The only choice you have to make is if you will file married filing jointly or separately. You will be going down the ITIN route if your spouse does not get into the US by next tax filing season.

[geowrian 22,337]

1 hour ago, Jpoy said:

my question is should I file my taxes next year as MARRIED/SEPARATELY or MARRIED/JOINTLY? What are the PROS/CONS of both?

You can do either (or Head of Household in limited circumstances with a child).

 

The main pro of MFS is simplicity. You file normally. If she lacks an SSN or ITIN, just write in "NRA", per the 1040 instructions.

She does nothing.

 

The main pro of MFJ is double the standard deduction (possibly resulting in thousands of dollars less of taxes being owed / larger refund). There are a few main cons:

1) She must have an SSN or ITIN. She can get an ITIN while abroad, although it is a little but of work.

2) She must make an election ot be treated as a resident alien. She is allowed to do this as the spouse of a USC (https://www.irs.gov/individuals/international-taxpayers/nonresident-alien-spouse).

3) As a result of #2, she must claim her entire worldwide income like all USCs and resident aliens. She may qualify for the FEIE via form 2555/2555EZ, which would allow you to exclude the taxes on this income (up to ~$100k in income).

 

Also, remember that stimulus check you probably got already? That was an advance rebate of a tax credit that will be on the 2020 taxes. The issue is if you use an ITIN for either individual, then you won't qualify for the tax credit (except military relatives). You won't have to pay anything back, but you/her won't get the remaining $1200 that would go to her her unless she uses an SSN.

 

In either case, you can always amend your taxes later to file jointly or add the SSN. So nothing is ever really "lost"...just delayed.

Edited June 29, 2020 by geowrian

[Jpoy 2]

11 minutes ago, geowrian said:

You can do either (or Head of Household in limited circumstances with a child).

 

The main pro of MFS is simplicity. You file normally. If she lacks an SSN or ITIN, just write in "NRA", per the 1040 instructions.

She does nothing.

 

The main pro of MFJ is double the standard deduction (possibly resulting in thousands of dollars less of taxes being owed / larger refund). There are a few main cons:

1) She must have an SSN or ITIN. She can get an ITIN while abroad, although it is a little but of work.

2) She must make an election ot be treated as a resident alien. She is allowed to do this as the spouse of a USC (https://www.irs.gov/individuals/international-taxpayers/nonresident-alien-spouse).

3) As a result of #2, she must claim her entire worldwide income like all USCs and resident aliens. She may qualify for the FEIE via form 2555/2555EZ, which would allow you to exclude the taxes on this income (up to ~$100k in income).

 

Also, remember that stimulus check you probably got already? That was an advance rebate of a tax credit that will be on the 2020 taxes. The issue is if you use an ITIN for either individual, then you won't qualify for the tax credit (except military relatives). You won't have to pay anything back, but you/her won't get the remaining $1200 that would go to her her unless she uses an SSN.

 

In either case, you can always amend your taxes later to file jointly or add the SSN. So nothing is ever really "lost"...just delayed.

Thanks for the detailed answer! More than likely she will not be here in the US yet when I file my taxes for next year. If I were to choose MFJ for next year, how difficult is it to obtain an ITIN for her? 

I will be sending her CR-1 packet sometime next month and hopefully she'll be here in the US by September 2021, if everything goes well. This is the only matter so far that I'm concerned with since I have little to no knowledge about it. Is it okay to PM you about this? 

[geowrian 22,337]

7 minutes ago, Jpoy said:

Thanks for the detailed answer! More than likely she will not be here in the US yet when I file my taxes for next year. If I were to choose MFJ for next year, how difficult is it to obtain an ITIN for her? 

I will be sending her CR-1 packet sometime next month and hopefully she'll be here in the US by September 2021, if everything goes well. This is the only matter so far that I'm concerned with since I have little to no knowledge about it. Is it okay to PM you about this? 

If you haven't filed yet, then yeah, she likely won't be in the US by the time taxes are due next year.

 

I have not done it myself, but many VJ members have. An outline of the process is here: https://www.irs.gov/credits-deductions/individuals/how-do-i-apply-for-an-itin

I believe most people tend to go with options 2 or 3, as available within their country. Option 1 involves mailing sensitive documents to the US, and the mail systems in some countries are unreliable so that is a decent deterrent.

 

My mailbox is consistently full, sorry! But feel free to tag me in a post as needed.

Edited June 29, 2020 by geowrian

[Jpoy 2]

4 minutes ago, geowrian said:

If you haven't filed yet, then yeah, she likely won't be in the US by the time taxes are due next year.

 

I have not done it myself, but many VJ members have. An outline of the process is here: https://www.irs.gov/credits-deductions/individuals/how-do-i-apply-for-an-itin

I believe most people tend to go with options 2 or 3, as available within their country. Option 1 involves mailing sensitive documents to the US, and the mail systems in some countries are unreliable so that is a decent deterrent.

 

My mailbox is consistently full, sorry! But feel free to tag me in a post as needed.

Filed as 'single' this past Feb 2020 and will be filing 'married' in 2021. I am currently browsing through all the PDF's about this matter and wow there's only one (1) page for the W7? Really?! Lol. 

Can I do this application on her behalf since the mailing system here stateside is more reliable? 

[geowrian 22,337]

9 minutes ago, Jpoy said:

Filed as 'single' this past Feb 2020 and will be filing 'married' in 2021. I am currently browsing through all the PDF's about this matter and wow there's only one (1) page for the W7? Really?! Lol. 

Can I do this application on her behalf since the mailing system here stateside is more reliable? 

I'd have to defer on the W-7 questions, sorry.

I'm unaware of any issue with you completing the form for her, but it needs both her signature as well as her original documents (i.e. her passport).

[Jpoy 2]

15 minutes ago, geowrian said:

I'd have to defer on the W-7 questions, sorry.

I'm unaware of any issue with you completing the form for her, but it needs both her signature as well as her original documents (i.e. her passport).

Copy. Can we apply for the ITIN now and not wait until the last minute? 

[geowrian 22,337]

13 minutes ago, Jpoy said:

Copy. Can we apply for the ITIN now and not wait until the last minute? 

My understanding is no. Generally the ITIN application must include the tax return for which an ITIN is required.

https://www.irs.gov/pub/irs-pdf/iw7.pdf, page 4:

Quote

How To Apply

Follow the guidelines below if you’re applying for a new ITIN or renewing an existing ITIN. To determine if you need to renew your ITIN, see Do You Need To Renew Your ITIN, later.

...

Applying for an ITIN for the first time.

If you’ve never had an ITIN before and are submitting an application for a new ITIN, include the following in your application package.

1.Your completed Form W-7. ...

2.Your original tax return(s) for which the ITIN is needed. Attach Form W-7 to the front of your tax return. If you’re applying for more than one ITIN for the same tax return (such as for a spouse or dependent(s)), attach all Forms W-7 to the same tax return. Leave the area of the SSN blank on the tax return for each person who is applying for an ITIN. After your Form W-7 has been processed, the IRS will assign an ITIN to the return and process the return. There are exceptions to the requirement to include a U.S. federal tax return. If you claim one of these exceptions, you must submit the documentation required instead of a tax return. See Exceptions Tables, later.

3.Original documents, or certified copies of these documents from the issuing agency, required to support the information provided on Form W-7. ...

The exceptions for #2 start on page 11. They cover pretty limited conditions, generally for those who have earned some sort of income within the US.

 

Basically, the IRS doesn't like issuing ITINs unless actually necessary. Until you are filing a tax return, it's not deemed necessary (barring those exceptions).

[JeanneAdil 6,592]

4 hours ago, Jpoy said:

Thanks for the detailed answer! More than likely she will not be here in the US yet when I file my taxes for next year. If I were to choose MFJ for next year, how difficult is it to obtain an ITIN for her? 

I will be sending her CR-1 packet sometime next month and hopefully she'll be here in the US by September 2021, if everything goes well. This is the only matter so far that I'm concerned with since I have little to no knowledge about it. Is it okay to PM you about this? 

it is not difficult 

the form needs to be completed with supporting documents / marriage certificate and another like proof of her birth

you can only do it with paper filing as online apps don't have this question in their sites to answer / that takes a little longer 

Phillipines is not like those here who are dealing with high high fraud countries /  for those of you who are,  IRS will investigate the documents to make sure they are not fake.   Just saying this as i don't want others to think it is as simple as yours will be

[BlinkerFluid 7]

@Jpoy I got my wife an ITIN here in the states while she is still in PH. I looked up the IRS  ITIN Acceptance Agent (accountant) and made an appointment in my state. https://www.irs.gov/individuals/international-taxpayers/acceptance-agent-program

 

1) fill out the W-7 and have you and your wife sign it 😉.

2) you have to have your wife's passport in hand. My wife mailed hers to me.

3) the agent/accountant will want to video chat with your wife; as we did this on Whatsapp.

4) you can't file for an ITIN if you are not filing your taxes for that year thru an agent/accountant. So be prepared to file your taxes for that year. And be aware you will be filing by PAPER and it will take a looooong time. I filed our joint tax return in first week of February 2020, and it has not been processed yet. So if you are expecting a refund, plan on it taking 9 months to process your return. this doesnt mean you have to wait on it to file it with NVC on CEAC. just upload your filled out return by your accountant.

5) the agent charges a fee, I think I paid $75.

 

We received her ITIN 5 weeks later. 👍

 

The only other way without the agent is to send your W-7 and her passport into the IRIS and pray it gets approved and pray again her passport is actually returned after 16 weeks processing.

 

You wont be able to apply for the ITIN until next year because you and your wife were married this year 2020, since you cant put her on a return for 2019. for an ITIN she has to be your spouse, not girlfriend. But i would do it ASAP in January or Feb of 2021. I had to wait for the same reason last year.

Edited June 29, 2020 by MM&HM

[DaveAndAnastasia 2,093]

6 hours ago, geowrian said:

The main pro of MFJ is double the standard deduction (possibly resulting in thousands of dollars less of taxes being owed / larger refund).

... and if there's a large difference between your taxable income and your spouse's, then you'll likely save a decent amount due to lower marginal tax rates, too (barring extremely high or low taxable income).

[Jpoy 2]

On 6/29/2020 at 4:54 PM, MM&HM said:

@Jpoy I got my wife an ITIN here in the states while she is still in PH. I looked up the IRS  ITIN Acceptance Agent (accountant) and made an appointment in my state. https://www.irs.gov/individuals/international-taxpayers/acceptance-agent-program

 

1) fill out the W-7 and have you and your wife sign it 😉.

2) you have to have your wife's passport in hand. My wife mailed hers to me.

3) the agent/accountant will want to video chat with your wife; as we did this on Whatsapp.

4) you can't file for an ITIN if you are not filing your taxes for that year thru an agent/accountant. So be prepared to file your taxes for that year. And be aware you will be filing by PAPER and it will take a looooong time. I filed our joint tax return in first week of February 2020, and it has not been processed yet. So if you are expecting a refund, plan on it taking 9 months to process your return. this doesnt mean you have to wait on it to file it with NVC on CEAC. just upload your filled out return by your accountant.

5) the agent charges a fee, I think I paid $75.

 

We received her ITIN 5 weeks later. 👍

 

The only other way without the agent is to send your W-7 and her passport into the IRIS and pray it gets approved and pray again her passport is actually returned after 16 weeks processing.

 

You wont be able to apply for the ITIN until next year because you and your wife were married this year 2020, since you cant put her on a return for 2019. for an ITIN she has to be your spouse, not girlfriend. But i would do it ASAP in January or Feb of 2021. I had to wait for the same reason last year.

Thanks much for the response! Can I PM you directly about this? 

On 6/29/2020 at 3:10 PM, JeanneAdil said:

it is not difficult 

the form needs to be completed with supporting documents / marriage certificate and another like proof of her birth

you can only do it with paper filing as online apps don't have this question in their sites to answer / that takes a little longer 

Phillipines is not like those here who are dealing with high high fraud countries /  for those of you who are,  IRS will investigate the documents to make sure they are not fake.   Just saying this as i don't want others to think it is as simple as yours will be

Right right. Thanks for the response/help.

[BlinkerFluid 7]

@Jpoy Sure. Pm me.