Yes, you qualify to elect to claim VA for tax purposes because of the Military Spouse Residency Relief Act (MSRRA). Or you can keep TX.
Please be aware that TX does not have a State income tax therefore it might be more beneficial if you keep TX for now.
If you choose this then your husband will file a separate VA return. "If you and your spouse filed a joint federal return, but only one of you is a Virginia resident, the resident must use Filing Status 3 - Married, Filing a Separate Return" (VA Tax).
You will file your federal return married filing jointly since this is usually more beneficial.
Please follow these steps to enter your income under self-employment income:
- Login to your TurboTax Account
- Click on the Search box on the top and type “self-employed”
- Click on “Jump to self-employed”
- Continue through the questions
- "How much of your work took place within the United States?" screen answer "None of this work took place within the United States"
If you were 330 full days during a 12-month period in Japan then you might qualify for the Foreign Earned Income Exclusion under Physical Presence Test for your self-employment income. Please follow these steps:
- Click on the Search box on the top and type “foreign income”
- Click on “Jump to foreign income”
- Choose “A Form 1099-MISC or other self-employment income” and click “Continue”.
- On the "Enter Your Gross Profit From Foreign Self-Employment" screen enter your gross profit
- TurboTax will walk you through the questions.
Please see How do I prepare a joint federal return and separate state returns? , What is the self-employment tax?, What self-employed expenses can I deduct? for additional information.
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