spouses's income abroad

[rkk1 34]

Hi all. I read through the recent tax thread that was posted a few days back. I'll be filing taxes with my accountant this week, and will be filing as married (despite the fact that my husband isn't living here yet). I wasn't sure if I was supposed to file as 'married filing separately' or 'married filing jointly'. My dad suggested I either file as head of household (if allowed) or as married filing jointly.

Anyway, what I'm wondering is... if filing in either of the above categories, does my husband need to submit his income? My husband has studied accounting in India, and he firmly states that he does not have to pay US taxes as he has never made any money in/from the US. (He has never set foot in the US to date.) All his money is made in India, and thus he only pays taxes in India. I told him that maybe things are different since he's married to a US citizen, but he says this doesn't change things as far as taxes go.

Furthermore, by US standards my husband makes very little (though by his standards his family is upper middle class). His equivalent US income is only about $300-400 per month (though this money obviously has much more purchasing power in India). So I don't even know if that money is considered taxable or not by US laws as it is very little.

My plan is to get the paperwork from the accountant this week, and scan and email it to my husband to get his signatures and have him snail-mail me his documents back (as we have to get everything in before April 15th tax day).

Would this plan work? Do I need any copies of my husband's income or taxes paid in India, or anything else that you guys can suggest? Thanks!

[lubnajavid 20]

quick and short answer to your post:

i plan to file married filing jointly - my wife lives in pakistan and works there.

i will file this was for a couple of reasons - of course financial benefit but also to have additional eveidence of co-mingling of our finances to the USCIS/NVC/Embassy

A W-7 will be required - you can get this from the www.irs.gov site - this will need to be signed by your husband also - along with the required identification requirments (notarized copy of passport, national id card etc - see the list that the form requires in its notes.)

After two in person visits the local tax office also gave me the following tellephone numbers to call and get further info - i have yet to call them - but i fully expect to have to show my wife's limited income (by US standards) and have no problems doing so.

Specialty Tax hotline 1800 829 4933

International Taxpayer customer service 1 267 941 1000

[Matt1968 13]

quick and short answer to your post:

i plan to file married filing jointly - my wife lives in pakistan and works there.

i will file this was for a couple of reasons - of course financial benefit but also to have additional eveidence of co-mingling of our finances to the USCIS/NVC/Embassy

A W-7 will be required - you can get this from the www.irs.gov site - this will need to be signed by your husband also - along with the required identification requirments (notarized copy of passport, national id card etc - see the list that the form requires in its notes.)

After two in person visits the local tax office also gave me the following tellephone numbers to call and get further info - i have yet to call them - but i fully expect to have to show my wife's limited income (by US standards) and have no problems doing so.

Specialty Tax hotline 1800 829 4933

International Taxpayer customer service 1 267 941 1000

Hello,

Just to add, I filed MFJ as well only because the return was much higher than MFS. My wife worked overseas also and that income can be exempted with a form 2555 if your spouse makes under 90K(can't remember exact amount but it's around this). I used Turbo tax and it does it for you automatically.

Matt

[alizon 77]

Ditto to the above: if you want to file jointly, you will have to report your spouse's income (because you have to elect to have him be treated as a resident for tax purposes), but you should be able to exclude all foreign income below a certain level (it's over $90,000). I had a professional do all of that, so unfortunately, I don't know which forms you need other than the W-7.

EDIT: Hmm...I know the documents for being a resident for tax purposes (or was it the W-7? I don't remember) ask for a "date of entry" for the US, so I don't know if him never having been here is going to be a problem.

Edited March 10, 2012 by alizon

[Matt1968 13]

Ditto to the above: if you want to file jointly, you will have to report your spouse's income (because you have to elect to have him be treated as a resident for tax purposes), but you should be able to exclude all foreign income below a certain level (it's over $90,000). I had a professional do all of that, so unfortunately, I don't know which forms you need other than the W-7.

EDIT: Hmm...I know the documents for being a resident for tax purposes (or was it the W-7? I don't remember) ask for a "date of entry" for the US, so I don't know if him never having been here is going to be a problem.

yeah, it is the W-7. I had an acceptance agent review my form, and he told me to just write Never in that spot and it wouldn't be a problem.

Matt

[alizon 77]

yeah, it is the W-7. I had an acceptance agent review my form, and he told me to just write Never in that spot and it wouldn't be a problem.

Matt

[rkk1 34]

Thanks so much, LubnaJavid, Matt and Alizon. So I will make sure to send my husband a copy of the W-7 and the 2555. There is a form called the 2555-EZ which is definitely 'easier' in that it is more simplistic than the 2555. I wonder if we could just send that. Anyway, although the accountant will be the one putting all this together, I just want to find out in advance what we need, just in case the accountant isn't aware of procedures for foreigners.

[rkk1 34]

Oh...

I forgot to ask... I noticed that the W-7 form is for the ITIN. Is it necessary to apply now for that at the same time as me filing taxes? From what I understood from the other tax thread, the ITIN might take 6-10 weeks (or something like that), which would put me way over the April 15 tax deadline. I don't know if this matters or not if the taxes are being filed at the same time as the ITIN application. Conversely, I've read that some other people are just writing 'NRA' (Non-resident Alien) in the as the foreign spouse's identification number. So I don't know if that is an option if we are too late to apply for ITIN for this year.

Edited March 10, 2012 by rkk1

[alizon 77]

Don't forget that you have to have a written and signed declaration from your husband of wanting to be treated as a resident for tax purposes! There isn't a specific IRS form for that, but H&R Block had a form for it, and I think there are a couple examples floating around the forums.

[rkk1 34]

Don't forget that you have to have a written and signed declaration from your husband of wanting to be treated as a resident for tax purposes! There isn't a specific IRS form for that, but H&R Block had a form for it, and I think there are a couple examples floating around the forums.

Hah hah... actually I don't think my husband would want to be considered a US resident for tax purposes. Although I haven't passed on this thread's information yet, he was the one who kept stating that he doesn't have to pay US taxes or have anything to do with US taxes. I have emailed him the forms mentioned in this thread, but he'll be pretty annoyed when he finds out that he will have to pay for a notarized Apostilled copy of his passport (as the Apostille cost is very expensive for him). I'm not even sure if there is an Apostille service center in his city, so he'll probably have to take a 4 hour (per way) train to Delhi to get this done. So although he'll do this begrudgingly, I don't think he will write that he wants to do it, when he surely does not.

Edited March 10, 2012 by rkk1

[alizon 77]

Oh...

I forgot to ask... I noticed that the W-7 form is for the ITIN. Is it necessary to apply now for that at the same time as me filing taxes? From what I understood from the other tax thread, the ITIN might take 6-10 weeks (or something like that), which would put me way over the April 15 deadline. I don't know if this matters or not. Conversely, I've read that some other people are just writing 'NRA' (Non-resident Alien) in the as the foreign spouse's identification number. So I don't know if that is an option if we are too late to apply for ITIN for this year.

You aren't too late for the federal process: you submit the W-7 with your federal tax return (1040). Both have to be submitted by mail to a center in Texas, and the IRS will add the ITIN to your 1040 after they assign it. Then they'll process your 1040. I also need my husband's ITIN for my state taxes, so I'm currently waiting on mailing those, but if it gets too close to April 17, I'll mail it off without his ITIN. As far as I know, NRA only works for married filing separately because to file jointly, you have to be treated as a RESIDENT alien, not a non-resident alien. And one final note: they'll be sending your husband's ITIN to him, not to you (according to my tax person).

Hah hah... actually I don't think my husband would want to be considered a US resident for tax purposes. Although I haven't passed on this thread's information yet, he was the one who kept stating that he doesn't have to pay US taxes or have anything to do with US taxes. I have emailed him the forms mentioned in this thread, but he'll be pretty annoyed when he finds out that he will have to pay for a notarized Apostilled copy of his passport (as the Apostille cost is very expensive for him). So although he'll do this begrudgingly, I don't think he will write that he wants to do it, when he surely does not.

To file jointly, he has to. Otherwise, you are married filing separately or as head of household (but this is only if you have dependents).

He's right that he has no US tax obligation. This whole process is entirely for YOU to get the biggest refund possible. But for that to happen, he has to submit himself to a US tax obligation, i.e. that everything over $95,100 is taxed.

Edited March 10, 2012 by alizon

[rkk1 34]

You aren't too late for the federal process: you submit the W-7 with your federal tax return (1040). Both have to be submitted by mail to a center in Texas, and the IRS will add the ITIN to your 1040 after they assign it. Then they'll process your 1040. I also need my husband's ITIN for my state taxes, so I'm currently waiting on mailing those, but if it gets too close to April 17, I'll mail it off without his ITIN. As far as I know, NRA only works for married filing separately because to file jointly, you have to be treated as a RESIDENT alien, not a non-resident alien. And one final note: they'll be sending your husband's ITIN to him, not to you (according to my tax person).

Great info... thank you Alizon!

To file jointly, he has to. Otherwise, you are married filing separately or as head of household (but this is only if you have dependents).

Hmm... then it seems like he and I will need to have a chat about this. I don't know if he'll get on board with this or not, but I'll see what he says.

[Inky 1,110]

which would put me way over the April 15 tax deadline.

The tax deadline is April 17th not 15th.

[alizon 77]

Hmm... then it seems like he and I will need to have a chat about this. I don't know if he'll get on board with this or not, but I'll see what he says.

You can always work your taxes as MFS and MFJ and show him the difference in refund (or lowered payment). That should relieve his annoyance about paying to have his passport accepted.

[Matt1968 13]

Oh...

I forgot to ask... I noticed that the W-7 form is for the ITIN. Is it necessary to apply now for that at the same time as me filing taxes? From what I understood from the other tax thread, the ITIN might take 6-10 weeks (or something like that), which would put me way over the April 15 tax deadline. I don't know if this matters or not if the taxes are being filed at the same time as the ITIN application. Conversely, I've read that some other people are just writing 'NRA' (Non-resident Alien) in the as the foreign spouse's identification number. So I don't know if that is an option if we are too late to apply for ITIN for this year.

Hello,

If you are filing MFJ, you will need:

1: W-7 form(this is for you spouse to receive an Taxpayer Identification number for tax purposes, only use if your spouse doesn't already have a SS#)

2: Your 1040 tax return

3: Form 2555(ez)-Foreign earned Income exclusion Form

4: Notarized copy of your spouse's passport

5: Declaration letter from you spouse tell the IRS he/she was a non-resident the last day of 2011 and that you and him/her both elect for him/her to be treated as a resident alien for the entire year for tax purposes.

You would send all this in together to:

Internal Revenue Service

ITIN Operations

P.O. Box 149342

Austin, TX 78714-9342

You cannot e-file this way you can only send it in snail mail. For MFS I've seen people say you don't need an W-7 form, but I didn't pay to much attention to MFS, because once I saw how much I would get back when MFJ, I completely shut MFS out of my mind.

Matt