@kruthika , Namaste ji
What I get from your post :
1. You a US Person ( Resident for Tax purposes / GreenCard ), having a tax home in US
2. Your spouse is Indian citizen & resident ( for purposes of the Tax Treaty ) is self-employed and is taxed in India.
3. You wish to file as MFJ
MFJ filing would require
(a) A request signed by both filers, asking for the NRA to be treated as a Resident for Tax purposes.
(b) the spouse to have US Tax ID (TIN ).
4. Note that while this MFJ would get you a higher standard deduction ( assuming you are not eligible for head-of-Household filing status ), it would also the tax rate of your US sourced income. This is because TurboTax will first compute the tax liability on the joint world income and then deduct from it the tax levied on the excluded income.
5. Also note that once the spouse has requested to be treated as a resident, it remains valid till for the future years. So one needs to look at the longer term benefits.
6. While FEIE is available for the NRA spouse because of foreign tax home ( form 2555 ), the Schedule-C ( for sole proprietor/self-employed ) is prepared under US tax laws and may be different than under Indian Tax laws.
7. And yes because of Totalization agreement between US-SSA and India , one need to pay SECA to only one country ( with a certificate of participation from the other country ).
Does all the above make sense ? Is there more I can do ? You can either respond here or PM me -- especially if there are items that are not of general interest -- just NO PII ( Personally Identifiable Information)
Namashkar ji
pk
