NRA Filing Joint Questions

[SalvadorBahia 4]

I have a couple questions that I have not yet been able to get answers to with the research I have done - please help if you can.  Here's the situation:

 

My wife (Brazilian NRA) were married in 2019.  I filed separately for 2019 mainly because I could not figure out the joint process even with the help of turbotax.  I still haven't figured it out but would like to refile 2019 and complete 2020 jointly.  Below are some facts:

 

• My wife has a SSN that she obtained around 10 years ago;
• She never worked or lived in the US in 2019 or 2020;
• She has income in Brazil (less than US$100k);
• I have income here in the US and have lived solely in the US for 2019 and 2020.

 

To file jointly do I include her Brazilian income?  I know we need to write a statement saying we will treat her as a resident alien for tax purposes. What about the taxes she paid in Brazil - do I receive credit for that?  I have read in some places that her income can be excluded with foreign earned income exclusion?  This and what forms I actually need to submit are where I am most confused.  Turbotax has not been very helpful with this and the local tax experts do not appear to have much international experience.

 

Many thanks and best regards!

[SteveInBostonI130 3,457]

Hello,

 

This is mainly and immigration forum.  I suggest you try a tax forum or get a good tax accountant.

 

Why do you want to file as MFJ?  To try to claim the covid stimulous?  With your wife earning significant income in Brazil, I am not sure you would get much benefit as MFJ.  Again, tax forums or an accountant will give you better answers.

[JeanneAdil 6,510]

Brazil is not part of the US tax treaty so if you include her as MFJ ,  you need to pay US taxes on her income

 

https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z

 

you can file MFS and let her file in Brazil

[SalvadorBahia 4]

2 hours ago, SteveInBostonI130 said:

Hello,

 

This is mainly and immigration forum.  I suggest you try a tax forum or get a good tax accountant.

 

Why do you want to file as MFJ?  To try to claim the covid stimulous?  With your wife earning significant income in Brazil, I am not sure you would get much benefit as MFJ.  Again, tax forums or an accountant will give you better answers.

Sorry - tried to keep this in the proper forum.  We finally have an interview scheduled and am trying to plan this and next year.  Not trying to get the stimulus but the MFJ has significant savings over MFS.

1 hour ago, JeanneAdil said:

Brazil is not part of the US tax treaty so if you include her as MFJ ,  you need to pay US taxes on her income

 

https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z

 

you can file MFS and let her file in Brazil

I have seen that but I still can't figure out if I can take a credit for the taxes she paid in Brazil?

[Ayrton 965]

6 hours ago, JeanneAdil said:

Brazil is not part of the US tax treaty so if you include her as MFJ ,  you need to pay US taxes on her income

 

https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z

 

you can file MFS and let her file in Brazil

They can still use 2555 to exempt her brazilian income. We did that last year after I moved to the US in 2019.

[Ayrton 965]

8 hours ago, SalvadorBahia said:

I have a couple questions that I have not yet been able to get answers to with the research I have done - please help if you can.  Here's the situation:

 

My wife (Brazilian NRA) were married in 2019.  I filed separately for 2019 mainly because I could not figure out the joint process even with the help of turbotax.  I still haven't figured it out but would like to refile 2019 and complete 2020 jointly.  Below are some facts:

 

• My wife has a SSN that she obtained around 10 years ago;
• She never worked or lived in the US in 2019 or 2020;
• She has income in Brazil (less than US$100k);
• I have income here in the US and have lived solely in the US for 2019 and 2020.

 

To file jointly do I include her Brazilian income?  I know we need to write a statement saying we will treat her as a resident alien for tax purposes. What about the taxes she paid in Brazil - do I receive credit for that?  I have read in some places that her income can be excluded with foreign earned income exclusion?  This and what forms I actually need to submit are where I am most confused.  Turbotax has not been very helpful with this and the local tax experts do not appear to have much international experience.

 

Many thanks and best regards!

To file jointly you will have to include her income, but you can use form 2555 to exempt up to 107k.

 

The amount I received in Brazil before I moved was too low to be required to file taxes there, so I just skipped that. So I don't know if you can get a tax credit for that.

[SalvadorBahia 4]

1 hour ago, Ayrton said:

To file jointly you will have to include her income, but you can use form 2555 to exempt up to 107k.

 

The amount I received in Brazil before I moved was too low to be required to file taxes there, so I just skipped that. So I don't know if you can get a tax credit for that.

Thanks!  Definitely some information I was looking for!

[Wuozopo 4,293]

On 3/11/2021 at 9:08 AM, SalvadorBahia said:

To file jointly do I include her Brazilian income?  I know we need to write a statement saying we will treat her as a resident alien for tax purposes. What about the taxes she paid in Brazil - do I receive credit for that?  I have read in some places that her income can be excluded with foreign earned income exclusion?  This and what forms I actually need to submit are where I am most confused.  Turbotax has not been very helpful with this and the local tax experts do not appear to have much international experience.

You can use Form 1116 to receive a credit for foreign taxes paid. You have to choose whether you want to excluded her foreign income on Form 2555 or get a credit for the taxes she paid on Form 1116. You can’t do both.

Foreign Tax Credit https://www.irs.gov/taxtopics/tc856

 

If doing the Foreign Earned Income Exclusion, you will find that in TurboTax at the very end of their questions on income topics. The section is called “Less Common Income”. It will ask about many odd forms of income you don’t have, but one topic will be foreign income which will be where it creates the Form 2555.

 

[JeanneAdil 6,510]

On 3/11/2021 at 6:18 PM, Ayrton said:

They can still use 2555 to exempt her brazilian income. We did that last year after I moved to the US in 2019.

the list from the IRS site does not include Brazil since IRS is behind on all things it may not have been caught to exclude it but the US has no exempt tax treaty with Brazil

[Ayrton 965]

8 minutes ago, JeanneAdil said:

the list from the IRS site does not include Brazil since IRS is behind on all things it may not have been caught to exclude it but the US has no exempt tax treaty with Brazil

I suggest you to read the instructions for the form 2555. You don't need a tax treaty to use 2555 if you meet the physical presence test, which I did and OP's wife did.

 

The tax treaty is necessary for the bonafide residence test, but you have to meet either the bonafide residence test or the physical presence test, not both.

 

"You must complete either Part II or

Part III of Form 2555, but not both

parts.

 

Part II

Bona Fide Residence Test

 

To meet this test, you must be one of the

following.

• A U.S. citizen who is a bona fide

resident of a foreign country, or countries,

for an uninterrupted period that includes

an entire tax year (January 1–December

31, if you file a calendar year return).

• A U.S. resident alien who is a citizen or

national of a country with which the United

States has an income tax treaty in effect

and who is a bona fide resident of a

foreign country, or countries, for an

uninterrupted period that includes an

entire tax year (January 1–December 31, if

you file a calendar year return). See

Table 3 at IRS.gov/pub/irs-utl/

Tax_Treaty_Table%203.pdf for a list of

countries with which the United States has

an income tax treaty in effect.

 

...

 

Part III

Physical Presence Test

 

To meet this test, you must be a U.S.

citizen or resident alien who is physically

present in a foreign country, or countries,

for at least 330 full days during any period

of 12 months in a row. A full day means

the 24-hour period that starts at midnight.

To figure 330 full days, add all separate

periods you were present in a foreign

country during the 12-month period shown

on line 16. The 330 full days can be

interrupted by periods when you are

traveling over international waters or are

otherwise not in a foreign country. See

Pub. 54 for more information and

examples.

Note. A nonresident alien who, with a

U.S. citizen or U.S. resident alien spouse,

chooses to be taxed as a resident of the

United States can qualify under this test if

the time requirements are met. See Pub.

54 for details on how to make this choice."