Hi,
I'm a US citizen in Illinois and my spouse moved here in November 2024 (when we got married). He has a SSN, but no green card (yet) and no income in the US in 2024. He does not pass the substantial presence test.
My understanding is that we can file jointly or separately.
If Filing Jointly
We can claim that my spouse is a "tax resident" for all of 2024.
Question 1: My spouse's income in Germany was well above the maximum amount that can be excluded. Am I right to still fill out "Foreign Earned Income and Exclusion" but instead of asking for an exclusion go for the foreign tax credit?
Question 2: For the tax credit I choose credit over deduction. I choose "First year I am eligible for the election" for Simplified Limitation Election Eligibility and elect simplified calculation. Then, for the general income category I add the wage (even though I already added it to "Foreign Earned Income and Exclusion" - I tried not adding it but then my Federal Due increased by a lot). I leave everything empty, except for "Foreign Taxes Paid - Germany" where I choose "No, I have foreign taxes paid on rental, royalty, or other income (including wages)" and add the taxes paid in Germany. After all of that I have a federal due of almost $3k. Now my question: the average income tax was about 36% in Germany and I am surprised that we have to pay something in the US since I read everywhere that filling jointly will be beneficial. What did I do wrong or what am I missing?
If Filing Separately
If filing jointly is indeed not beneficial, filing separately might be better.
Question 3: Since my spouse has no green card, doesn't pass the substantial presence test and didn't have any income in the US, does he have to file at all? Is it advisable to file at least a 1040-NR with $0?
