How to file?

[travusb 69]

I've been trying to do some research for the last couple of hours and I think I have a handle on our tax situation but I want to make sure.

 

My wife is in the process of AOS, adjusting from a K1. She's been in the US a total of 270 days this year, she come to stay for 5 months at the beginning of 2021 while waiting for her K1 interview. She went back to Canada for the interview and come back to the US in September.

We had her quit her job at the end of 2020 so she could come to the US for that 5 months and go to the interview hassle free. So she hasn't made any income in 2021. We also got her SSN as soon as she got here to make it easier to file taxes this year.

 

So if I understand correctly we'll file as married filing jointly and will elect her as a resident alien since she's been in the US long enough. Since she has no income from Canada, no income at all, we won't have to file any foreign tax forms like a FEIE, or do we?

 

To elect resident alien does that mean I just file a tax return as normal, file a paper tax return with a specific option checked, or something else entirely?

Also am I correct in the assumption that she will qualify for the 3rd stimulus payment or do I need to do something special in that regards to not receive it by mistake?

 

I hope this makes sense and that I have as firm as an understanding as I think I have on our tax situation.

Thanks in advances for any replies with helpful information.

Edited January 17, 2022 by travusb

[Crazy Cat 41,851]

@Wuozopo

[JeanneAdil 6,505]

you married in 2021 so u can file joint and get the $25,100 for joint filers/  why MFS and only giving yourself the $12, 550 as if she filed she would have no income to get a return on and u would loose out on the larger deduction

she has a SS # so easy

 

head of household only allows Deduction of $18,000 

and u are no longer single in 2021 

 

Stimulus checks she is not eligible for as she was not here in 2018 and 2019 as a resident alien or spouse of USC

 

Stimulus checks will be based on information from your most recent tax filings, either tax year 2019 or 2018. If you have not filed your 2019 taxes, the IRS will use information from your 2018 tax return.Sep 9, 2021

Edited January 17, 2022 by JeanneAdil

[arken 4,197]

1 hour ago, travusb said:

So if I understand correctly we'll file as married filing jointly and will elect her as a resident alien since she's been in the US long enough.

Even if she had come to the US for the first time on Dec 25 and married you on Dec 31, you could treat her as resident alien and do married filing jointly since she already has SSN.

[Wuozopo 4,293]

7 hours ago, travusb said:

So if I understand correctly we'll file as married filing jointly and will elect her as a resident alien since she's been in the US long enough.

You only have to make the election if she didn’t have enough physical presence (days in US). It’s a way to be considered a resident alien (if married to a US citizen) when you have neither a greencard or enough days of physical presence in the US. I didn’t count your days but if you did and say she has enough, then just file a joint return. You can efile. 

 

 

7 hours ago, travusb said:

Since she has no income from Canada, no income at all, we won't have to file any foreign tax forms like a FEIE, or do we?

No to Foreign Earned Income Exclusion. That form is only if she had foreign income during the tax year 2021. Nothing to report and nothing to exclude for her.  

As a side note: If she had at least $10,000 (US dollar conversion) in a Canadian bank(s) anytime during 2021, she will need to make the report known as FBAR. It is not taxed or part of the tax return, but is due at the same time as income tax filing. It’s just an online informational report to the US Treasury letting them know she had money  in a foreign financial institution during 2021. Google FBAR if you aren’t already familiar. Find an official government site to get all the details, not some site offering to do it for a fee.

 

7 hours ago, travusb said:

Also am I correct in the assumption that she will qualify for the 3rd stimulus payment or do I need to do something special in that regards to not receive it by mistake?

Yes she will as long as your income isn’t over $150,000. It’s built into the tax return. You likely already received your stimulus #3 early, but it is a 2021 stimulus and she can collect hers as a credit on your joint return. In simplified terms (because the IRS worksheet it’s calculated on is so convoluted) it will go like this …Figure your 2021 stimulus as a couple $2800.  Did you receive any payment already? Yes $1400.

$2800 - $1400 = $1400 balance due as a credit. It will be added to your refund. If you use a tax prep program like TurboTax, it just does all the magic in the background without you having to do much thinking except say how much you already received. 

You made some very wise (or lucky) decisions. Quitting her job before 2021 so no foreign income and getting her SSN has made filing your 2021 tax return very easy. 
 

 

Edited January 18, 2022 by Wuozopo

[Wuozopo 4,293]

@travusb

 

One more note: If she earned any interest or dividends on bank accounts/investments during 2021, that is reportable on your joint return as income. It’s just like if you report interest/dividends. They go on Schedule B…yours, hers, or anything earned from a joint financial account.  This has nothing to do with FEIE which is only about money earned from a job, which the IRS calls “earned income”.

[travusb 69]

13 hours ago, Wuozopo said:

You made some very wise (or lucky) decisions. Quitting her job before 2021 so no foreign income and getting her SSN has made filing your 2021 tax return very easy. 

The quitting the job and getting the SSN was planned to make it easy and simple. The being in the US over 183 during this year so that I can efile was a lucky accident.

 

@Wuozopo

Thanks for all that information. Makes me feel better knowing I was on the right track.