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prismarc
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

I was looking to file my tax return on TurboTax, however it says that I cannot deduct my University tuition from it because I am filing separately from my husband instead of jointly. My husband has worked in the U.S. at our university last year, however he is on his F-1 Visa with a valid social security number for work. Other than that, he's not a U.S. Citizen or a green card holder. Will I still be considered for education credit or will I have to file jointly? What happens if I file jointly?
10 Replies
DS30
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

Yes, you will only be able to claim the education credit (if eligible) if you are filing as married filing jointly.

Although your husband is on an F-1 visa and may be exempt from the Substantial Presence Test for the first 2 (if non-student) or 5 (if student) calendar years that he is in the US (and is therefore considered a non-resident aliens (NRA) for US tax purposes), if you are considered a US Citizen or resident alien in 2016, you can choose to file jointly with him.

By choosing to file jointly, he would need to include his worldwide income on your jointly filed tax return (in USD). If he has to report US-source income as a nonresident alien and this is his main source of income, you may be able to lower your overall taxes and you will be able to take the education credit by including him on a jointly filed return (a win-win situation).

It is important to note that by including your NRA spouse on your tax return, you will be treating your spouse as a resident alien for tax purposes. What this means is that you will get the exemption for your spouse, but all your spouse's worldwide income will be subject to taxes (in USD) by the United States. Click here for more information about claiming a non-citizen spouse on your tax return

Here are some additional steps for filing married filing jointly to include your NRA spouse: 

  • under the file tab, you will need to select "file by mail" and print a copy of your federal income tax return.
  • attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies (Nonresident Spouse Treated as a Resident). It should contain the following information:
    •  A declaration that one spouse was a non-resident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year, and that you choose to be treated as U.S. residents for the entire tax year.
    • The name, address, and identification number of each spouse.

Please note : If you have foreign bank accounts, you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR) if are a US citizen or resident and:

  1. you had a financial interest in or signature authority over at least one financial account located outside of the United States; and
  2. the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

To be directed to the US Treasury Government Website to prepare a Report of Foreign Bank and Financial Accounts, click FBAR (TurboTax does not support this form).

You will be allowed an automatic 2-month extension if you are a U.S. citizen or resident alien and on the regular due date of your return:

  • You are living outside of the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or
  • You are in military or naval service on duty outside the United States and Puerto Rico

The IRS notes that even if you are allowed an extension, you will have to pay interest on any tax not paid by the regular due date of your return. So this 2-month extension only allows you to escape late filing penalties. You will need to attached a statement to your federal income tax return that states which of these 2 reasons you are claiming as your reason for the 2-month automatic extension

If the April 15th (April 18th for 2017) deadline is approaching and you feel that you will need more than 2 months or just to be on the safe side, you can always file a 6-month extension using form before the original tax return deadline.

Use this link for more information about Filing for a 6 month extension in TurboTax  

Having a US mailing address will not affect your claim for the automatic 2-month extension but it may have an effect on state tax issues if you maintain a residence in the US while you are abroad.

Use this IRS link for more information about US Citizens and Resident Aliens Living Abroad

prismarc
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

Thank you, that was very helpful! For clarification purposes, the 1040NR can only be filed by mail, or could we send it online? Because I'm not sure when we will be moving (in 4 weeks) whether in the U.S. or out of state, so I'm just afraid if we will not be able to receive a notification about our status and whatnot.

Also, what happens if we file online on Turbotax rather than by mail, will something bad happen? I'm just wondering if that affects us in a huge way.
DS30
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

If you are including your NRA spouse on your tax return, you will not need to file a 1040NR (a 1040NR cannot be filed through TurboTax). If you include your NRA spouse on your 1040, you will have to file by mail because you will need to attach the declaration statement (that is important).

I have updated my answer to include additional info (including extension information).
prismarc
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

Thank you so much! Should I be filing with the form 1040? Does form 1040A not applysince my husband is a NRA?
DS30
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

You can use either 1040EZ, 1040A or 1040. Just not 1040NR.
prismarc
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

Okay, got it! Thank you!
One last question, what happens if we decide to file separately? Will there be a lot of effects or downside for each of us?
DS30
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

Yes, If you file as married filing separately , you won’t be able to take education credits and deductions. You will lose the American opportunity credit and the lifetime learning credit. You also lose the deduction for student loan interest and the tuition and fees deduction. And you won’t be able to exclude from income the interest on U.S. savings bonds that you cash in for college expenses.
DS30
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

Here is a link for more information about married filing jointly or separately :<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Return/Should-You-and-Your-Spouse-File-Taxes-...>
prismarc
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

I can now understand the pros of filing jointly now as there seems to a bit more loss. Thank you so much for your time and the information you have shared. They were very helpful. We really appreciate it. Thank you!
DS30
New Member

Education Credit Deduction for Filing Marriage Separately with a Foreigner?

You are very welcome and much good luck in your future.
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