General Tax Filing Questions

[KeithANDJonathan 0]

My husband and I are currently waiting for his spousal visa interview (CR1). For the past two years, since we have been married, I have filed MFS. I have filed through TurboTax and mailed my filings with non resident alien written in the spousal SSN. If he is able to get an interview and get his visa this year and able to enter the US, I would like to file MFJ. My questions are related to his income earned in Mexico. (1) Since he doesn’t have a W2 or a similar document, does anyone know how I would enter that income into a tax prep software? (2) How would I convert pesos to USD? Would it just be on the conversion rate at the end of the year? (3) Is there a way to deduct what Mexico taxes my husband has paid from my tax liability? (4) If he enters the US this later year, do I have to claim all of his Mexico earnings even though he was not in the US all year? If anyone has any suggestions on this topic, I would greatly appreciate it. 

[JeanneAdil 6,583]

https://taxsummaries.pwc.com/united-states/individual/foreign-tax-relief-and-tax-treaties

 

Mexico has a tax treaty with the US so foreign income is excluded up to the amounts for given year

so ,  file form 255

 

The exclusion will be $120,000 for 2023

 

What i did was ask my husband how much he made a month and convert to US dollars times months worked

 

u can do 1040x and all the work for ITIN and change your status to MFJ  for 2022 now but keep IRS transcripts that u did for 2022 and copy of the new 1040x and documents

 

https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse

 

What is Form 2555 used for? Form 2555 is the form you file to claim the Foreign Earned Income Exclusion, which allows you to exclude up to $112,000 of foreign earned income for the 2022/2023 tax year. The Foreign Earned Income Exclusion exists the help prevent double-taxation.Apr 10, 2023

[Mike E 11,741]

21 minutes ago, KeithANDJonathan said:

2) How would I convert pesos to USD?

I always use the exchange rate as of 12/31/YYYY 

[Crazy Cat 41,985]

I use the published IRS average yearly exchange rate by country/currency. 

[KeithANDJonathan 0]

32 minutes ago, JeanneAdil said:

https://taxsummaries.pwc.com/united-states/individual/foreign-tax-relief-and-tax-treaties

 

Mexico has a tax treaty with the US so foreign income is excluded up to the amounts for given year

so ,  file form 255

 

The exclusion will be $120,000 for 2023

 

What i did was ask my husband how much he made a month and convert to US dollars times months worked

 

u can do 1040x and all the work for ITIN and change your status to MFJ  for 2022 now but keep IRS transcripts that u did for 2022 and copy of the new 1040x and documents

 

https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse

 

What is Form 2555 used for? Form 2555 is the form you file to claim the Foreign Earned Income Exclusion, which allows you to exclude up to $112,000 of foreign earned income for the 2022/2023 tax year. The Foreign Earned Income Exclusion exists the help prevent double-taxation.Apr 10, 2023

 
Thank you very much for the information. I was looking at the IRS website link you sent and read the following:

• Generally, neither you nor your spouse can claim tax treaty benefits as a resident of a foreign country for a tax year for which the choice is in effect. However, the exception to the saving clause of a tax treaty might allow a tax treaty benefit on certain specified income.

Does that mean I wouldn’t be able to exclude my spouses Mexico earnings? Maybe I am not understanding. Thank you again!

[UScitizen2023 0]

Here is a helpful IRS website for you: https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse

 

How to Make the Choice

Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following information:

1. A declaration that on the last day of the tax year, one spouse was neither a U.S. citizen nor a U.S. resident within the meaning of IRC section 7701(b)(1)(A) and the other spouse was and that you choose to be treated as U.S. residents for the entire tax year.
2. The name, address, and identification number of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)

Regarding the foreign exchange rate: 

https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates#:~:text=You must express the amounts,pay or accrue the item.