Filing taxes jointly with foreign spouse questions, and reassurance

[dalox303 2]

Many people seem to have similar questions, but havent seen this one yet (maybe its a common sense answer, but i want to be sure). Wifey and I are choosing to file jointly, were married and why not take advantage of the tax deductions. Long story short, she doesnt have an itin (were counting her as an alien resident), and she didnt work aboard in 2020 and had no income. Question is, is it as simple as just filing the 1040 with only my income (hers being zero) and check off filling jointly, or is there an irs document or any proof that we need to include in our paperwork to show that she didnt have any income?

 

Secondly, she has money in a foreign account that gained interest, whats the threshold? Whats the most interest she can gain without having to report it to the irs?

 

thanks

-Dan

 

[Ayrton 965]

8 hours ago, dalox303 said:

Many people seem to have similar questions, but havent seen this one yet (maybe its a common sense answer, but i want to be sure). Wifey and I are choosing to file jointly, were married and why not take advantage of the tax deductions. Long story short, she doesnt have an itin (were counting her as an alien resident), and she didnt work aboard in 2020 and had no income. Question is, is it as simple as just filing the 1040 with only my income (hers being zero) and check off filling jointly, or is there an irs document or any proof that we need to include in our paperwork to show that she didnt have any income?

 

Secondly, she has money in a foreign account that gained interest, whats the threshold? Whats the most interest she can gain without having to report it to the irs?

 

thanks

-Dan

 

In order to file jointly, she must be considered a Resident for Tax Purposes. So she needs a SSN or ITIN. Is she living in the US now? Does she pass the presence test? If not, you both must sign a letter stating that you consider her a resident for tax purposes for the whole year of 2020.

 

IRS doesn't need proof of income, they are going to assume that what you write there is true.

 

I'm not familiar with the bank interest question, so someone else might help you with that.

[seekingthetruth 1,246]

9 hours ago, dalox303 said:

Whats the most interest she can gain without having to report it to the irs?

If you file jointly, all income has to be reported.  There is no threshold.  If she paid foreign tax on the income, you can take that as foreign tax credit.

[Wuozopo 4,293]

10 hours ago, dalox303 said:

Long story short, she doesnt have an itin (were counting her as an alien resident), and she didnt work aboard in 2020 and had no income. Question is, is it as simple as just filing the 1040 with only my income (hers being zero) and check off filling jointly, or is there an irs document or any proof that we need to include in our paperwork to show that she didnt have any income?

She must get an ITIN to file jointly. Your incomplete timeline says K1 visa. So when did she arrive in the US?

to get an ITIN you can complete your tax return with both signing,  fill out a W-7 ITIN application, and go in person to an IRS Taxpayer assistance center to get her passport copied and certified. All that gets filed on paper by mailing to an Austin TX filing address. They will issue the ITIN then process the return.

 

 

10 hours ago, dalox303 said:

Secondly, she has money in a foreign account that gained interest, whats the threshold? Whats the most interest she can gain without having to report it to the irs?

Any interest she earn is reported in US dollar equivalence on Schedule B just like you report your interest. It is taxable.

 

If her financial account exceeds $10k anytime in 2020, then she files a FBAR .  Actually if the sum of all her accounts totals $10k then FBAR report is required. That is not on the tax return. It is a separate report filed online reporting the foreign account to the Treasury Dept. It is not taxed. It is just an informational report. Google FBAR. 

 

Edited February 6, 2021 by Wuozopo

[dalox303 2]

8 hours ago, Wuozopo said:

She must get an ITIN to file jointly. Your incomplete timeline says K1 visa. So when did she arrive in the US?

to get an ITIN you can complete your tax return with both signing,  fill out a W-7 ITIN application, and go in person to an IRS Taxpayer assistance center to get her passport copied and certified. All that gets filed on paper by mailing to an Austin TX filing address. They will issue the ITIN then process the return.

After she arrived and we got married I stopped updating my timeline, apologies for the gap! She arrived in July of 2020 and we got married on 10/1/2020. She does pass the presence test (she was here in 2019 on a 90day visa), so she would be considered a resident alien for tax purposes. She had no income in 2020, and didnt file taxes in her country. Thank you for the information on the FBAR, we will most likely need to fill this out. 
 

Just so im clear, if she had no income in 2020, we dont need to file any other separate document or supporting documents to prove this? And I just file the 1040 (filing jointly along with her W7), with my tax info because she would have zero income? Just seems too simple, but maybe its because immigration was such a hassle. 
 

thanks again!

[seekingthetruth 1,246]

3 hours ago, dalox303 said:

Just so im clear, if she had no income in 2020, we dont need to file any other separate document or supporting documents to prove this? And I just file the 1040 (filing jointly along with her W7), with my tax info because she would have zero income? Just seems too simple, but maybe its because immigration was such a hassle

No, there is nothing needed to prove she had no income.  However, you said she had bank interest income.  It doesn't matter if she did not file a tax return there.

 

If she is counted as a resident for 2020, and had foreign account(s) totaling over 10k USD anytime during 2020, she needs to file FBAR.

https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

[dalox303 2]

15 minutes ago, seekingthetruth said:

 

If she is counted as a resident for 2020, and had foreign account(s) totaling over 10k USD anytime during 2020, she needs to file FBAR.

Thank you! So the FBAR covers bank interest as well as foreign account balance if over 10k? 

[seekingthetruth 1,246]

1 minute ago, dalox303 said:

Thank you! So the FBAR covers bank interest as well as foreign account balance if over 10k? 

No, FBAR only is for the balance that is over 10k.

 

For the interest, just add it up and report in on your 1040.  You won't have a 1099, but you can still put it on the return.

[Wuozopo 4,293]

14 hours ago, dalox303 said:

Just so im clear, if she had no income in 2020, we dont need to file any other separate document or supporting documents to prove this? And I just file the 1040 (filing jointly along with her W7), with my tax info because she would have zero income? Just seems too simple, but maybe its because immigration was such a hassle. 

No proof needed. I know you’re used to documenting, but IRS is simpler. You will need documentation with her ITIN application W-7. See the instructions for acceptable documents at  https://www.irs.gov/individuals/how-do-i-apply-for-an-itin Her passport is a stand alone proof for the ITIN. It would involved mailing her actual passport off to the filing address in Austin. Or you can find an IRS  Taxpayers Assistance Center that can certify her passport and prepare a certified copy of the passport to mail to Austin TX. (I think they can do the sending for you.). So—

• Completed paper tax return signed by both of you
• W-7 ITIN application with required documentation (her passport or a copy of it if you get it certified at a TAC)

Mail those to:

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

 

[Wuozopo 4,293]

11 hours ago, dalox303 said:

Thank you! So the FBAR covers bank interest as well as foreign account balance if over 10k? 

The FBAR is a report of the highest balance of the account(s) during 2020 if they total over $10,000 when converted to USD$$$. For example

Savings acct $11,000

Checking acct $2000

Report both because the total is $13k, so she holds more than $10k in foreign accts 

 

Savings acct $9000

Checking acct $2000

Report both because the total is $11k, so she holds more than $10k in foreign accts 

 

Bank or investment interest has nothing to do with FBAR which is just highest balance of each acct in 2020.

The IRS counts interest or dividends paid to her or her accts in 2020 as income so it goes on the tax return. Schedule B Is where you report her interest./dividends. You do not submit any documentation of it with the tax return. You just list her interest earnings on Schedule B along with the bank that paid it. I would include the foreign city.

Bank of Korea (Seoul, South Korea)......$21.45

ABC Bank (Seoul, South Korea).............$11.21

 

[dalox303 2]

3 hours ago, Wuozopo said:

The FBAR is a report of the highest balance of the account(s) during 2020 if they total over $10,000 when converted to USD$$$. For example

Savings acct $11,000

Checking acct $2000

Report both because the total is $13k, so she holds more than $10k in foreign accts 

 

Savings acct $9000

Checking acct $2000

Report both because the total is $11k, so she holds more than $10k in foreign accts 

 

Bank or investment interest has nothing to do with FBAR which is just highest balance of each acct in 2020.

The IRS counts interest or dividends paid to her or her accts in 2020 as income so it goes on the tax return. Schedule B Is where you report her interest./dividends. You do not submit any documentation of it with the tax return. You just list her interest earnings on Schedule B along with the bank that paid it. I would include the foreign city.

Bank of Korea (Seoul, South Korea)......$21.45

ABC Bank (Seoul, South Korea).............$11.21

 

Thank you!

[dalox303 2]

5 hours ago, Wuozopo said:

The FBAR is a report of the highest balance of the account(s) during 2020 if they total over $10,000 when converted to USD$$$. For example

Savings acct $11,000

Checking acct $2000

Report both because the total is $13k, so she holds more than $10k in foreign accts 

 

Savings acct $9000

Checking acct $2000

Report both because the total is $11k, so she holds more than $10k in foreign accts 

Last questions, how do i get a hard copy of the Fbar? Cant seem to find it, And should i be using my fiances maiden name (whats on her passport) or should i use her married name (my last name) on tax documents?

Edited February 7, 2021 by dalox303

[Wuozopo 4,293]

2 hours ago, dalox303 said:

Last questions, how do i get a hard copy of the Fbar? Cant seem to find it, And should i be using my fiances maiden name (whats on her passport) or should i use her married name (my last name) on tax documents?

Fiancé? That’s a mistake, right? If your wife plans to use your last name then go ahead with that. Hopefully you are getting the visas in that married name so her greencard will be in her married name. It will cost around $5-6 hundred to change names on a greencard. (I can’t remember actual cost, but very expensive).

Why do you want a paper FBAR.? It’s all online now. From the IRS FBAR page.

How to File

You must file the FBAR electronically through the Financial Crimes Enforcement Network’s BSA E-Filing System. You don’t file the FBAR with your federal tax return. 

If you want to paper-file your FBAR, you must call FinCEN’s Regulatory Helpline to request an exemption from e-filing. See Contact Us below to reach this Helpline. If FinCEN approves your request, FinCEN will send you the paper FBAR form to complete and mail to the IRS at the address in the form’s instructions. IRS will not accept paper-filings on TD F 90-22.1 (obsolete) or a printed FinCEN Form 114 (for e-filing only). 

[dalox303 2]

15 hours ago, Wuozopo said:

Fiancé? That’s a mistake, right? If your wife plans to use your last name then go ahead with that. Hopefully you are getting the visas in that married name so her greencard will be in her married name. It will cost around $5-6 hundred to change names on a greencard. (I can’t remember actual cost, but very expensive).

Why do you want a paper FBAR.? It’s all online now. From the IRS FBAR page.

Wife sorry! The fbar asks for her itin, so it should be efiled after we mail in her w7 and receive an itin? 

[Wuozopo 4,293]

13 minutes ago, dalox303 said:

Wife sorry! The fbar asks for her itin, so it should be efiled after we mail in her w7 and receive an itin? 

Wait for the ITIN. IT’s not due until April so you’ll probably have the ITIN back. I didn’t even do my first until a year later because I didn’t know about it. It was the paper form back then, so I filled out two for two years. No issues at all. Just do it done when you can.