SweetiJean covered the ground thoroughly. Just a few comments on applying for ITIN - if your wife remains abroad you might want to read these: <a href="
http://www.irs.gov/Individuals/International-Taxpayers/Obtaining-an-ITIN-from-Abroad" rel="nofollow" target="_blank">
http://www.irs.gov/Individuals/International-Taxpayers/Obtaining-an-ITIN-from-Abroad</a> ,
<a href="
http://www.irs.gov/Individuals/Acceptance-Agent-Program" rel="nofollow" target="_blank">
http://www.irs.gov/Individuals/Acceptance-Agent-Program</a>. It takes a while to go through the process. They've changed procedures since I was a certifying Acceptance Agent, so I don't know the details, but the ITIN unit has a reputation for being very precise in checking the details.
