Filing 2009 US Taxes

[BrahmaBull 0]

Hello All, new here, but my wife has spent a bit of time on these boards figuring everything out. I have a question about taxes.

We were married in November of 2009 so I understand I have to file as married. We are in the early stages of a getting a spouse VISA.

Do I file Married, filing separately OR Married, filing jointly?

I have also heard I may need to get an ITEN number in lieu of a social security number for her, until she gets a SS? Is this true?

Sorry, a lot there, any help is extremely appreciated!

[payxibka 10,047]

either one is possible... simply prepare based on both scenarios and select the one that provides the lowest tax liability... If you want to elect MFJ, then you must "declare" your spouses non-US income as US income and report it on the 1040. The amount, if any, of foreign income exclusion (or credit) will depend on your individual tax situation

ITIN will be required

Edited January 8, 2010 by payxibka

[BrahmaBull 0]

either one is possible... simply prepare based on both scenarios and select the one that provides the lowest tax liability... If you want to elect MFJ, then you must "declare" your spouses non-US income as US income and report it on the 1040. The amount, if any, of foreign income exclusion (or credit) will depend on your individual tax situation

ITIN will be required

So if I do married filing separately, I don't have to claim her earnings, right?

If the difference in tax liability is less than a few hundred dollars, it might be worth it to save the headaches of getting her an ITEN...

[Nich-Nick 3,354]

Was she a K1 and did she get a SSN right after her entry into the country? Then you don't need ITIN. Also it is my understanding from posts I read last year that people send the ITIN application along with the tax filing. We didn't do it that way, but I remember people with experience saying that was the proper way to do it.

About your tax liability. Your taxes as married filing separately will most likely be higher than they were last year as single, with the same basic income, etc. So you really should work them two ways to see what married filing jointly would do for you. It would probably be less than you paid last year as single. One income (hers will be excluded) but two personal exemptions and two standard deductions. All tax situations are different but my difference last year was over $1000 as married joint, over married separately.

[BrahmaBull 0]

So if I do married filing separately, I don't have to claim her earnings, right?

If the difference in tax liability is less than a few hundred dollars, it might be worth it to save the headaches of getting her an ITEN...

We're in the process of K3. We married in November, but she is still living in Canada......

[BrahmaBull 0]

If I do claim her CAN income as US income, do I also claim her CAN taxes?

Edited January 11, 2010 by BrahmaBull

[payxibka 10,047]

You can possibly exclude the income or the taxes paid (but not both) via

Foreign tax Credit - Form 1116

Foreign earned Income Exclusion - Form 2555

You prepare the return using either of the two forms that provides the best result

[wratran 0]

How can the IRS verify your non USC spouse income from oversea...if you decide...not to claim it?

There are no W2 or 1098 in vietnam...like we have here.

Edited January 11, 2010 by wratran

[Nich-Nick 3,354]

If I do claim her CAN income as US income, do I also claim her CAN taxes?

I don't think you get it. Her CAN income is not turned into US income. You just tell them on a form that she's a Canadian citizen and did not earn any money in the US.

Look at the Form 2555EZ

Part I (1) (first question) is where she says she is a bonfide resident of another country and for how long. It's probably since birth to "present." Ok, you can skip the rest of Part I.

Part II - You give her CAN address and occupation info

Part III - List dates she was in the US and say "zero" for days on business and "zero" for income earned in the US.

Part IV - Figure her income exclusion.

13. Start with a maximum of $91,400

14. How many days of 2009 was she a resident of CAN---365 days

15. This is where you multiply number of days she was resident in a foreign country. It calculates that she qualifies for 100% of the exclusion because she was a resident of CAN the whole year 2009. She can exclude $91,400 of earnings. If she had moved to the US July 1, then maybe she was only resided in a foreign country half a year. So she could only exclude half of the maximum ($45,700).

17. Enter her salary converted to US dollars. Example- she earned 25,000 Canadian dollars. Pick an average exchange rate. If it's .88 then

25,000 CAN x .88 = 22,000 in US dollars. Enter that on line 17.

18. Tells you to enter the 22,000 USD and also where to deduct it on your form 1040 (line 22).

So on your 1040 you entered "other income" of $22,000 (her CAN) but then on line 22 you subtracted $22,000 from your joint income. It's a wash, but you followed the IRS rules by filling out the form.

How can the IRS verify your non USC spouse income from oversea...if you decide...not to claim it?

There are no W2 or 1098 in vietnam...like we have here.

The IRS can't. It's only a matter of following the laws of the US or making up your own way to do it. You don't owe any more taxes either way you do it.

Edited January 12, 2010 by Nich-Nick

[Nich-Nick 3,354]

An very basic example for wratran

$40,000 - you earned

+$5,000 - she earned in Vietnam converted to US dollars

____________

$45,000 worldwide income on joint return

- 5,000 excluded (her foreign income excluded on line 22)

_____________

$40,000 taxable income

You won't have to pay any taxes on her income, so you don't really lose anything by telling the IRS she had a small income.

[wratran 0]

thanks for the detailed explanation.

When my wife came to the US, we didnt think about getting her bank statement....so we have nothing to show the IRS of her income.

[Nich-Nick 3,354]

thanks for the detailed explanation.

When my wife came to the US, we didnt think about getting her bank statement....so we have nothing to show the IRS of her income.

You don't actually send anything to the IRS. It's all self calculated and reported. We just roughed out some notes on what my husband made in the UK from Jan-August when he quit his job. It wasn't based on any official forms as I recall...maybe an old paystub. Then we looked up exchange rates which had changed widely in 2008. We just picked a number that worked for us and seemed sorta average, but probably more to our advantage to show a lower UK income. And that's what we reported. We saved the notes with our tax files because there's no way we would remember any of the figures down the line had we been audited by the IRS.

[road417king 7]

I don't think you get it. Her CAN income is not turned into US income. You just tell them on a form that she's a Canadian citizen and did not earn any money in the US.

Look at the Form 2555EZ

Part I (1) (first question) is where she says she is a bonfide resident of another country and for how long. It's probably since birth to "present." Ok, you can skip the rest of Part I.

<bunch of deleted stuff to make it smaller... >

The IRS can't. It's only a matter of following the laws of the US or making up your own way to do it. You don't owe any more taxes either way you do it.

Hi, can you tell me where you found this information? Is it on an IRS website or somewhre else? I'm in this same situation except that my wife is in Japan and I'd like to understand how this all works and do the right thing (we got married in November and are in the CR1 application process).

Thanks!

Mike

[Nich-Nick 3,354]

Publication 519 (2008), U.S. Tax Guide for Aliens (No 2009 version) http://www.irs.gov/pub/irs-pdf/p519.pdf

See page 10, middle column Nonresident Spouse Treated as a Resident tells where you can "elect" to have your wife considered a resident alien for tax purposes with a written statement. I read the entire publication last year and printed and highlighted sections I thought applied to us. Then I read those 2-3 more times plus any other references until it started making sense to me. After getting the basic information in my head, then I was able to use TurboTax Basic (CD installed version) to complete my taxes. It only offered the Form 2555 which is overkill for our situation, so I downloaded the Form 2555EZ and filled it in to submit with my mailed return.

Other useful links including how to get the ITIN number and mention of mailing the ITIN application along with the completed tax return.

html version of Pub 519

http://www.irs.gov/publications/p519/index.html P

http://www.irs.gov/businesses/small/intern...=129431,00.html

http://www.irs.gov/businesses/small/intern...96,00.html#itin

http://www.irs.gov/businesses/small/intern...d=97324,00.html

And here's the post where I showed my version of the statement electing to be treated as resident alien for tax purposes.

http://www.visajourney.com/forums/index.ph...t&p=3614434

On a complicated side note: If you happen to have alot of investments and capital gains reported on Schedule D, your taxes are figured by a Captial Gains worksheet rather than the tax tables. Foreign spouses income does play a slight role in that so it's not as simple as show foreign income, then subtract it back out if you have lots of dividends and capital gains. Turbo Tax does all the work for you. I had to really dig and analyze how the foreign income played a role, only out of curiousity of how it worked. I still came out ahead filing jointly.

[wratran 0]

nick nick...

do you know if we still can file 2555ez online. I will buy turbotax premiere. I would like to e-file so we can get the check faster...instead of mailing it in.