If you are married, you have to either file as Married Filing Separately or Married Filing Jointly.
When a spouse is a nonresident alien, you have two options:
- Treat your spouse as a resident alien for tax purposes. If you choose this option, you can file a joint tax return with your spouse. You will get the exemption for your spouse, but all your spouse's worldwide income will be taxed by the United States.
- Treat your spouse as a nonresident alien for tax purposes. If you choose this option, you cannot file a joint tax return. You must file with a status of "married filing separately." You may still be able to claim an exemption for your spouse, but only if that spouse has no income from U.S. sources and cannot be claimed as a dependent on anyone else's tax return.
Consider spouse's worldwide income
Vincenzo Villamena, managing partner of a firm that provides tax planning help for Americans living overseas and others with special situations, says the easiest thing to do is to simply file a joint return, treating a nonresident spouse as a resident, if necessary. “But for long term tax planning, this might not be the most beneficial move,” he says.
That's because the money you would save by gaining an exemption for the spouse might be less than the additional tax you would have to pay because all of your spouse's worldwide income will be subject to U.S. tax. “Every case is different in this situation,” Villamena says, so it pays to run the numbers using different options and see what saves you the most money.
