NEED HELP. I'm trying to file a joint 2021 return with my nonresident foreign spouse who worked entirely outside the USA. How do I enter her income?

[adamraywho-gmail]

TurboTax says I need to file 1040NR which is not included and then prompts to delete foreign income entries. Is this correct? Or should I just enter it as ordinary income and attach substitute W2 Form?

[pk]

@adamraywho-gmail  where are you residing -- foreign/ abroad or US soil ?  

Assuming your are US person ( Citizen/GreenCard ) , you should be able to file with a NRA spouse  under certain circumstances.  Is your spouse  living in your taxhome ( foreign or US )?  If in the USA, what visa is he/she under?  If abroad ( i.e. your tax home is abroad ), which country are you in  and he/she a citizen of that country ?

Please answer and I will circle back 

pk

[adamraywho-gmail]

Thanks for the reply PK.

I'm a US Citizen and moved abroad in 2021 to be with her. She doesn't have any visa. We have the W7 Form and signed statement ready to send in with the return. But, completing TurboTax is another story. . .

[pk]

@adamraywho-gmail , ok so you are sending in an application for ITIN for her and a letter / statement  saying that both she and you agree that she is to be treated as a resident for tax purposes  and lives in your tax home. 

If that is the case then you just enter her salary / income  -- where ?   Note that since you are abroad your wages.self-employment income is eligible for  Foreign Earned Income exclusion ( if you qualify ). She has the same  eligibility. Thus both of your earnings may be excludable from US taxes ( up to a max allowed for the year per taxapayer ).  Which country are you in ?

pk

[adamraywho-gmail]

Actually, My income is rental income from US. Her income is entirely foreign. TurboTax says she doesn't qualify for foreign income exclusion. As such, I'm wonder where to enter it in TurboTax. Under wages without a W2?? 

[NCperson]

if she is NRA, lving overseass with no US income, why are you even entering her on your US taxes?  why not just file Marriled - file separately?  

this is a good article 

https://www.hrblock.com/expat-tax-preparation/resource-center/filing/status/married-to-non-resident-....

[adamraywho-gmail]

Thanks for the input NCPerson, but we've already determined filing jointly is in our best interests short-term and long-term. As the article you shared pointed out,

"Filing jointly with a nonresident alien spouse is a popular choice, and in certain circumstances, can give you a big boost in the standard deduction. . . .If you do choose to treat your nonresident alien spouse as a resident there are many tax benefits that wouldn't otherwise be available to a nonresident."

Any help on how to add her income in TurboTax would be much appreciated!! 

[Critter-3]

If you did not receive a W-2 for your wages, there is no need to complete the W-2 section.  Report your foreign earned income on Form 2555.

If you started a W-2, then delete the W-2.

Enter w-2 in the Search box located in the upper right of the program screen.  Click on Jump to w-2

To enter Foreign Earned Income -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Less Common Income
• On Foreign Earned Income and Exclusion, click on the start or update button

Or enter foreign income in the Search/Find box located in the upper right of the program screen.  Click on Jump to foreign income

[adamraywho-gmail]

Hell o Critter 3,

Thank you for the practical reply. That's basically what I've done. But, TurboTax wants to walk me through the foreign income exclusion section and then prompts to delete the entries of foreign income upon answering that my wife is a NRA not working for a US company. It sounds like you're saying just ignore the prompts and confirm that those forms shouldn't be deleted, is that right??