You will file a 1040 if you are considered a resident alien.
See IRS: https://www.irs.gov/individuals/international-taxpayers/taxation-of-resident-aliens
Family
- Your children with ITINs can qualify for the Child Tax Credit but only $500 each, not the full amount.
- Your wife and you can file Married filing jointly. You should call the Social Security Administration and find out why your wife's SSN "never worked." If it does not match her legal name according to the IRS database, then you will not be able to file a tax return.
Foreign Taxes
If you paid foreign taxes, you can get the foreign tax credit using form 1116. However if there is no treaty between your country and the U.S., you cannot qualify. Search for form 1116 from the Federal tab and follow through the questions. Here is a list of countries with U.S. tax treaties: https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z
Foreign Account
You do not have to move your accounts from overseas to the US if you don't want to. Here is information you need regarding foreign accounts:
Turbo Tax will ask you if you have foreign accounts. If you answer 'yes,' it will bring you to the place where you answer questions to complete Form 8938 (FATCA). You can find the form by searching for it on the Federal tab.
The FBAR might be required as well. You don’t file the FBAR with the IRS or with TurboTax. It must be filed directly with the office of Financial Crimes Enforcement Network (FinCEN), a bureau of the Department of the Treasury, separate from the IRS. TurboTax does not file the FinCEN. Here is a link to the BSA E-Filing System.
If your foreign account has $10,000 or more in it that's when those forms come into play. Again, these are the forms:
FBAR and FATCA are two separate reporting events filed in two separate places.
Foreign Accounts Tax Compliance Act (FATCA)
Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. The IRS receives information about foreign assets on form 8938 on your federal tax return.
FBAR - Report of Foreign Bank and Financial Accounts (FinCEN Form 114)
A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. The name of the form to file If you have any questions or require technical assistance using the BSA E-Filing system, you may call them at 866-270-0733; or if calling from outside the United States, 313-234-6146.
Report of Foreign Bank and Financial Accounts (FBAR)
Here is an IRS article that explains the comparison between FATCA and FBAR requirements.
