How to File Taxes when married to a foreign spouse

How to File Taxes When Married to a Foreign Spouse

How to File Taxes When Married to a Foreign Spouse Introduction

How to file taxes when married to a foreign spouseMany US citizens in a marriage to someone abroad often question, “How to File Taxes When Married to a Foreign Spouse?”.

In the first place, US taxes are complex to say nothing of adding in being in a marriage with a foreign spouse.

In addition, how to file US taxes when married to a foreign spouse depends on several factors.

For example, these factors include:

  • The date that your marriage took place.
  • Your foreign spouse’s US residency status (resident alien vs. non-resident alien). Uniquely, you may claim your foreign spouse as a resident alien for tax purposes. In fact, you may even if he or she is currently a non-resident alien.
  • The foreign spouse’s employment, income, and/or lack of income.
  • Whether or not your foreign spouse has a social security number.

Under these circumstances, filing taxes with a foreign spouse seems daunting. Therefore, we explain how to file taxes when married to a foreign spouse as simple as we can.

In addition, we also discuss why it is important to file your taxes properly when doing a US Spouse Visa, Adjustment of Status, Removal of Conditions or citizenship application for your foreign spouse.

Marriage Date

tax filing if married before December 31stIn fact, your filing status depends partly on your marital status on the last day of the year. If you are legally married as of December 31, you’re considered to have been married for the full year for tax purposes. Therefore, you cannot file as Single. As a result, you must file with one of these tax filing statuses.

  • Married Filing Separately.
  • Married Filing Jointly.
  • Head of Household, if you qualify. To explain if you qualify, read further under the Head of Household section.

Likewise, this holds true even if your marriage is to a foreign citizen.

However, if you marriage date was after December 31st, you must still file as Single or Head of Household for that tax year.

Foreign Spouse’s US Residency Status

US Residency Information

With regards to your foreign spouse’s US residency status, residency is a major factor in how to file taxes when married to a foreign spouse.

In short, “alien” is the term in the United States referring to a citizen of another country. Moreover, aliens are further broken into “resident aliens” and “non-resident aliens” categories.

In fact, “resident aliens” and “non-resident aliens” are actually terms from federal tax laws. Resident aliens owe US tax on all their income. However, non-resident aliens only owe tax from U.S. income sources.

Resident Alien Definition

Track green card status

Regarding resident aliens, there are two ways to determine if someone is a resident alien including:

  • Green Card Test, or
  • Substantial Presence Test

For more detail information on resident aliens versus non-resident aliens, see IRS Topic No. 851 Resident and Nonresident Aliens.

Green Card Test

Regarding the green card test, if the alien is a lawful permanent resident during any time of the year, they are resident alien for tax purposes. Namely, it is known as the green card test because the permanent resident identification card is known as a “Green Card”.

However, you do not specifically have to have a green card in hand to pass this test.  For example, those with an immigrant visa are lawful permanent residents directly upon entry into the United States. In fact, their immigrant visa is stamped with an I-551 stamp at the Port of Entry. This stamp serves as a temporary green card until their green card arrives.

Substantial Presence Test

Even without being a lawful permanent resident, you are a resident alien for tax purposes if you pass the substantial presence test. If you satisfy the substantial presence test, your are treated as a resident alien for a calendar year.

In order to pass the qualifications, you must have been physically present in the United States on at least:

  • 31 days during the current year, and
  • 183 days during the 3-year period that includes the current year and the 2 years immediately preceding the current year. To satisfy the 183-day requirement, count:
    • All of the days you were present in the current year,
    • One-third of the days you were present in the first year before the current year, and
    • One-sixth of the days you were present in the second year before the current year.

However for this test, the term United States doesn’t include U.S. possessions, territories or U.S. airspace.  For the physical presence test, the United States includes the following areas:

  • All 50 states and the District of Columbia,
  • The territorial waters of the United States, and
  • The seabed and subsoil of those submarine areas that are adjacent to U.S. territorial waters and over which the United States has exclusive rights under international law to explore and exploit natural resources.

Non-Resident Alien Definition

If the alien does not meet either the green card test nor the substantial presence test, the alien is a non-resident alien for tax purposes.

For example, a spouse living abroad that is not or not yet a lawful permanent resident and does not meet the substantial presence test is a non-resident alien.

In addition, a newly married spouse recently here in the US on a K-1 fiance visa and does not have a green card yet is also a non-resident alien.

Tax Filing Status

Form 1040 tax filing status with foreign spouseAs a matter of fact, most us citizens married to a foreign spouse question what to check as their tax filing status on their Form 1040.

With regard to tax filing status, these are your options on the 1040 form:

  • Single.
  • Married Filing Jointly.
  • Married Filing Separately.
  • Head of Household.
  • Qualifying Widow(er).

Above all, if you are married by December 31st of the previous year, you cannot file as “Single” for that year. As a matter of fact, this is true even if your spouse is a resident or non-resident alien.

God forbid, your foreign spouse dies. However, if so, you may file as a qualifying widow(er).

Otherwise, your tax filing status of the remaining three options depend on whether your foreign spouse is a resident alien or non-resident alien.

Filing Taxes with a Non-Resident Alien

nonresident alienFor those with a non-resident alien spouse, the following tax filing status options are available to you:

  • Married Filing Separately.
  • Married Filing Jointly (if you elect to treat your non-resident spouse as a U.S. resident for tax purposes).
  • Head of Household (if you qualify).

Next, we go into more detail on how to file taxes with a non-resident alien spouse for each of the three tax filing status options.

Married Filing Separately

As a matter of fact, the most common filing status for a U.S. citizen in a marriage with a non-resident alien spouse is Married Filing Separately. Owing to the fact that this is the easiest way to file, it may be the reason why it is the most common way. By filing jointly, you have to go through the hurdles of obtaining an ITIN number for your non-resident alien spouse.

However, filing your taxes separately potentially comes at a cost comes at a financial cost. Ultimately, the possible cost is loss of potential tax credits and deductions. In addition, it might entail overall higher tax rates.

However, if your foreign spouse has foreign income, it might be better to file this way. Filing jointly subjects your spouse’s foreign income to U.S. taxation.

On the other hand, if your foreign spouse has no or little income, it may be better to reap the financial benefits of filing jointly.

Married Filing Jointly

Background

In fact, you can file jointly even if your foreign spouse is a non-resident alien.  In order to file jointly, you must elect to treat your non-resident spouse as a U.S. resident for tax purposes. By making this election, it allows you and your non-resident alien spouse to file a joint tax return. For this purpose, include a statement with signature from both spouses. Specifically, write this statement to simply state that you elect to treat your non-resident spouse as a U.S. resident for tax purposes.

By filing jointly, it allows you to take advantage of lower tax rates and deductions that are not available by filing separately. However, it does subject your spouse’s entire income to U.S. taxation. Also, Report of Foreign Bank and Financial Accounts (FBAR) and a Statement of Foreign Financial Assets (Form 8938) may be requirements if filing jointly.

For the most part, this status is most beneficial if your spouse does not earn any income or otherwise have any foreign accounts or investments.

However, One additional hurdle for choosing this option is the requirement for your spouse to obtain an Individual Taxpayer Identification Number (ITIN) if they’re not eligible for a Social Security number. For this purpose, an IRS Form W-7 is what you use to request an ITIN Number.

In addition, filing jointly with a non-resident alien must be done by paper filing. In other works, you cannot file electronically. Due to the fact that the written statement is a requirement, you must file by paper.  Because of this, filing jointly could also cause delays in the processing of your tax return.

How to Obtain a Social Security Number

If your non-resident alien spouse is eligible to obtain a social security number, obtain that as soon as you can. For example, a K-1 fiance is eligible to obtain a social security number soon after arriving. In fact, this saves a lot of hassles in obtaining an ITIN.

Concerning obtaining a social security number, see our blog post, Obtain Your Social Security Card.

However, if your spouse is ineligible to obtain a social security card, you must obtain an ITIN to file jointly.

How to Obtain ITIN

IRS Form W-7As we previously noted, use IRS Form W-7  to request an ITIN Number. For full details on how to complete and submit a W-7, see the IRS W-7 Instruction Webpage.

In fact, there supporting documentation is a requirement to accompany the W-7. Specifically, you must include documentation confirming your spouse’s identity and foreign status. For this purpose, your spouse’s foreign passport satisfies both these requirements alone. Therefore, the passport is the best supporting document to use.

For other optional qualifying documents, see the W-7 instructions above. Also, the supporting document(s) must be original or a certified copy of the original from the issuing authority. Ultimately, the IRS returns your original documents after processing.

There is an additional requirement for a dependent or spouse of a non-resident alien holding a U.S. visa.  Attach a copy of your visa to your Form W-7 and include a date of entry into the United States on line 6d. Also, those with a K-1 fiance visa that are in the US lawfully, married and not yet received a green card through adjustment of status should follow this.

When filing for a W-7, it must be sent by paper through the mail with paper filing of your 1040 tax return.

For this purpose, attached your W-7 and supporting documents to the front of your 1040 tax return. Also, attach additional Form W-7s to the front of your original 1040 tax return if you have more dependents requiring a W-7.

In addition, leave the area of the SSN blank on the 1040 tax return for each person who is applying for an ITIN.

After processing the Form W-7, the IRS assigns an ITIN to the return and processes the return.

Below, see our secret way of leaving the non-resident alien spouse’s social security number blank when using Turbo Tax software towards the bottom of this post.


Filing with Non-Resident Without SSN Alien Jointly Using Turbo Tax

In particular, TurboTax software does not fully support filing jointly with a non-resident alien spouse without a social security number. Specifically, it does not allow you to leave blank the ssn.

However, there is a way to sidestep this and use using TurboTax to leave the ssn blank.

In order to do this, leave the spouse’s ssn blank when TurboTax asks you to enter it.  Then, at the end, skip the error check section as long as your only error is missing spouse’s SSN.

Alternatively, add in a rouge social security number. Then, when you are about to print a PDF of the tax return, delete the rouge social security number so that it is blank.

FBAR Requirements

If the foreign spouse filing jointly with you has value of foreign financial accounts exceeding $10,000 at any time during the calendar year, they must report. For more information on FBAR reporting requirements, see the IRS Report of Foreign Bank and Financial Accounts (FBAR) webpage.

Form 8938, Statement of Specified Foreign Financial Assets

Your foreign spouse must use Form 8938 to report foreign financial assets if the total value of all their foreign financial assets if they are more than the appropriate reporting threshold. For information of the threshold requirements, see the Instructions for Form 8938.

Mailing Joint Tax Return

When using US Postal Service, mail Form W-7, your 1040 tax return, other tax form and schedule requirements, and supporting documentation requirements we mention above to:

Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

Alternatively, if using a private delivery service like FedEx, UPS or DHL, send to:

Internal Revenue Service
ITIN Operation
Mail Stop 6090-AUSC
3651 S. Interregional, Hwy 35
Austin, TX 78741-0000

Head of Household

You may qualify head of household purposes if your spouse was a nonresident alien at any time during the year. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien.

However, your spouse is not a qualifying person for head of household purposes. In fact, you must have another qualifying person. Also, you must meet the other requirements to be eligible.

Although your non-resident alien spouse cannot qualify you as a head of household, you can qualify if (1) or (2) applies:

  1. Paid more than half the cost of upkeep of a principal home for the whole year for a dependent parent. Yet, you do not have to live with your parent.
  2. Paid more than half the cost upkeep of the home you and the other qualifying person live in for more than half the year:
    • Your unmarried child, grandchild, stepchild, foster child, adopted child, or dependent foster child.
    • Your dependent married child, grandchild, stepchild, or adopted child.
    • Any relative on the list in the IRS Head of Household Non-Resident Alien Spouse Webpage for whom you can claim an exemption:

In many cases, this is the most beneficial status available when having another qualifying dependent available. Head of Household has lower tax rates and additional deductions. Your other qualifying dependent must have a social security number or ITIN. However, there is no requirement to get an ITIN for your non-resident alien spouse. Moreover, there is no requirement to report any of your non-resident alien spouse’s foreign income.

For more specific details on filing head of household because of a non-resident alien spouse, see the IRS Head of Household Non-Resident Alien Spouse Webpage for more information.

 

Filing Taxes with a Resident Alien Spouse

My green card wife who needs immigrant health insurance.For those with a resident alien spouse, the following tax filing status options are available to you:

  • Married Filing Jointly.
  • Married Filing Separately.

Notice that the Head of Household option is not available to those filing taxes with a resident alien spouse.

Next, we go into more detail on how to file taxes with a resident alien spouse for each of the three tax filing status options.

Married Filing Jointly

Indeed, filing taxes jointly with a resident alien spouse is relatively easy and simple. Due to the fact that a resident alien spouse is eligible to obtain a social security card, it makes thing much easier. In addition, you can submit these electronically.

However, some filing on the first year after becoming a resident alien may have significant foreign income or assets.  In that case, the foreign income and assets are taxable. Also, Report of Foreign Bank and Financial Accounts (FBAR) and a Statement of Foreign Financial Assets (Form 8938) may be requirements that may come into play.


Married Filing Separately

For the most part, filing separately is not to your benefit.  However, there are cases where filing separately may be to your benefit.  Maried Filing Separately: Marriage Tax Benefit or Penalty? is a great post that discusses these situations.

Filing your Taxes

In the United States, tax season is the time period between January 1st and April 15th of each year when individual taxpayers traditionally prepare financial statements and reports for the previous year. In the United States, individuals must file their annual tax return by April 15th of the year following their reportable earnings.

However, most individuals actually file their taxes between February 1st and April 15th. Due to the fact that most people do not have all their supporting tax documents until after February 1st, most people don’t file until after February 1st. Companies have a requirement to provide W2s to their employees by January 31st. In addition, tax payers usually have to wait for any 1099s, 1098 mortgage interest statements or other income and deduction statements.

With regards to filing, many people like to file as soon as they can if they are getting a refund.

On the other hand, other people like to wait until the last minute. For this purpose, they wait until April 15th to file.  Specifically, they wait if they owe the government money. Again, tax filings are due by April 15th.There are specifically three ways to prepare your tax return:

  1. Get out your calculator and fill out the paper forms yourself.
  2. Buy tax software that asks you questions to easily fill in information. Additionally, software does the math and fills out the forms for you. In addition, you can file your taxes electronically this way.
  3. Hire a tax professional to do your taxes for you.

Why File Taxes Properly When Immigration Benefits are Involved

In fact, filing taxes properly is to your benefit when current or future immigration benefits are in play.

By way of example, tax filing is a bonafide marriage item.  Therefore, if you are married and file as single, the consular officer or USCIS reviewer may question your bonafide marriage.

In addition, submitting your tax forms is a requirement of many immigration benefits. Furthermore, these filing require you to do this not only for proof of minimum income, but also for proof of bonafide marriage.

Therefore, use this guide on How to File Taxes When Married to a Foreign Spouse properly.

Incidentally, when filing an Affidavit of Support during tax season, see our post on, “What Year Tax Return To Use When Doing Affidavit Of Support During Tax Season“.

What is the Best Way to File Taxes With a Foreign Spouse

To sum up, we gave you our guide on your options on How to File Taxes When Married to a Foreign Spouse. Undoubtedly, people will ask what is the best way.

Unfortunately, we cannot answer that question.  That being said, the answer totally depends on your particular situation.

In fact, it depends on your income, your deductions or lack of deductions, and your foreign spouse’s income.

In addition, it depends on whether or not you want to go through the hassles of applying for an ITIN number if it is a requirement. Moreover, there can be other reporting hassles.

Therefore, you may want to consider the following:

  • Do a draft of your taxes for each filing status option available to you and see the outcome.
  • Go to a tax adviser and get an expert opinion.
  • Evaluate the financial benefits versus filing hassles.

Disclaimer

While all attempts are made to present correct information, it may not be appropriate for your specific circumstances and information may become outdated.

LoveVisaLife does not provide legal, tax law or tax advisory advice. Do not construe anything here as legal or tax law advice. The full contents of LoveVisaLife.com, such as text, comments, graphics, images, videos and other content on this site are for informational purposes only. For this reason, if you need legal advice, you should contact an attorney. In addition, if you need specific tax advise, seek a tax lawyer or tax adviser. Accordingly, we do not  intend for the contents to be a substitute for professional legal or tax adviser advice.