@hal5166 , given your circumstances ,
(a) you can file as MFJ ( Married Filing Joint ). All you have to do:
1. file a Form W-7 requesting an ITIN IN for your spouse. To keep TurboTax happy, you have to prepare the return using a dummy SSN -- MFJ ; choose to file by mail; Print Sign Date -- both; Replace dummy SSN with " N R A " ; Fill out the form W-7 and attach all required documents ( copies can be certified at US consulate / IRS etc. ) Then mail the whole thing to the IRS.
2. Then attach a statement signed by both you and your spouse, stating that she wants to be treated as a resident. -- sign and date -- bot.
3. Since you are both working and earning in Mexico, both your foreign incomes can be excluded from US taxes by using Foreign Earned Income Exclusion -- pay taxes ONLY to Mexico. However, you have to decide whether the SECA taxes ( 15.3% of net income, equivalent to FICA for wage earners in the US ) should be paid to which country -- pay to ONE -- US or MX.
If you need more help feel welcome to add to this thread or PM
Is there more I can do for you ?
