filing joint to add nonresident wife and foreign income

[dmbeaver]

I am a DOD Army civilian (U.S. resident) and my wife is a nonresident alien (Japanese citizen). We were married 24 November 2023. I have lived in Japan for the past three years and she has also maintained residency in Japan before our marriage. I wanted to file a joint return for 2023 tax year, unless the answer is that its better to file married separately until we get a new SSN or Tax number for her. In Japan, it is the business employer that files taxes directly on behalf of the employee so it takes a little time to get things broken down to taxes paid, compensations, and contributions. My Questions:

1. My wife does have a SSN that was issued when she worked at Disney World in Florida for three years that ended in 2019 so can I use that SSN to file a joint return?

2. Is it beneficial for us to then use dual status for her, nonresident up to 24 November, then treated as a resident from 24 November through 31 December 2023? Or, elect to treat her as a U.S. resident.

3. Do I enter my wife's income as a W-2 earnings or as a credit on another line or form for taxes already paid to the Japanese Government for 2023? 

[Vanessa A · Accepted solution]

1.  Yes, you can use the SSN she was issued when working at Disney.  The SSN is forever and does not expire.

2.  That will depend on your situation.  Every situation is different.  Her income prior to getting married would be taxable by the US if she filed as a full year resident and only partially taxable as a Dual Status Alien.  For some people it makes absolutely no difference if they file joint or separate. Generally, the biggest difference is the standard deduction is $13,850 if separte and $27,700 if married filing jointly.  If she has income, then the difference in the standard deduction may be offset by her income and not cause you to see a benefit.  The are some credits you may not be eligible for, such as education credits if you file separately.   

Married Filing Joint versus Separate

3.  You would enter your wifes income in the foreign income section of TurboTax by selecting Income>>Foreign Earned Income and Exclusion under Less Common income.  This will allow you to not only enter her income but also take a credit for taxes paid to Japan. 

[dmbeaver]

Thank you for your answer. I'm following the Turbo Tax questions under the Foreign Earned Income and Exclusion and the question askes whether my wife is a Resident Alien or Nonresident Alien. I'm not sure if I missed adding something in a required field. -To use this process, we have to elect to treat my nonresident wife as a Resident Alien by marriage to me, correct? Is this why you are saying she would then file as a "full year resident?" I haven't seen an option for the "Dual Status Alien" in this section, yet. -Selecting "Resident Alien" lets me proceed in the TT software, otherwise I am given the response that if she is a nonresident then I need to file a 1040-NR and TT does not have this form for filing. -What does electing to have my wife be a Resident Alien by marriage do for future taxes? Do we have to put a statement on the top of the form and send in the mail? And can we then file Joint or Separate taxes in the future if things change? Or do we have to mail in a new statement that changes the filing status in future years?

[DaveF1006]

Yes, you can choose to file Married Filing Jointly. This is advantageous to you because it is a much larger standard deduction as Vanessa A stated above. This addresses your question regarding what this will do for future taxes. let's address each question one at a time.

1. For the Foreign income and Exclusion question ,you will say that she is a Resident Alien (RA) because she isa RA for tax purposes if you file jointly.
2. Do not ask about Dual-Status.  This does not apply in this case.

Here is the procedure for filing Married Filing Jointly.
 

1. Prepare your return in Turbo Tax and choose Married Filing Jointly as your filing status. Remember, you will need to report your worldwide income as well as hers.
2. When you get to the Let’s get ready to e-file screen, select File by Mail.
3. Attach a statement to your return, signed by each of you that states that one of you is a U.S. citizen and the other is a nonresident alien and that you’re electing to both be treated as U.S. residents for tax purposes. 
4. Include the full name, address and Social Security number (or Individual Taxpayer Identification Number) of each spouse. 
5. Mail the return to the address on the instruction sheet that prints with the return.

If you decide to file separately, you will choose to File Married Filing Separately in the MY INFO section of your return. All you will need to do is report her name and Social security number. She will need to file a 1040 NR return for the income she made at Disney. Turbo Tax does not file 1040 NR but our affiliate at Sprint Tax prepares these returns. 

@dmbeaver