Nonresident alien spouse, FEIE, married filing jointly and standard deduction

[user17672869738]

Hello! 

Here's my situation. I'm a US citizen, working in the US for a few months out of the year, and going out of the country when I don't work. I don't have any foreign income.

My wife is neither a US Citizen or a green card holder, only been to the US on vacation and always lived and worked in her home country.

I'm trying to navigate the tax situation and the best way to get some of my money back.

Ideally I would like to file jointly. I know I have to get an ITIN number for her. Would I be allowed to claim foreign earned exemption for her income, and then apply a standard deduction for the rest - my income from the US.

Thank you for the help

[pk]

@user17672869738 ,

(a) As a US person , working / living in the US for more than 30 days, you would not be able to use FEIE for yourself.  You would be able to use foreign tax credit ( FTC ) for any income that is taxed by both US and your foreign home country ( assuming that this is not Canada or Mexico --  for which rules are different)

(b) Assuming that your marriage is recognized by the USA and the country where is a national/resident of , you should be able to ( along with an ITIN) treat her as a resident of US ( for tax purposes).  Thus her world income would come under the purview of the US taxation. This should also allow her income  ( assuming she meets the Physical Presence Test ) to be eligible for  FEIE.

(c) Assuming ( b) is satisfied you should be able to use MFJ and standard deduction.

 (d) Just out of curiosity, why do you shuttle between the two countries and work only for a short period in the USA --- why not have a foreign tax home ?  Because in such a case your foreign sourced income would  also be eligible FEIE. 

(e) Note that FEIE does not , by itself, reduce/ eliminate  the SECA/FICA  -- there must be a totalization agreement between the US and that foreign country.

Is there more I can do for you ?

[user17672869738]

Thank you so much for your  detailed response 

(b) We actually got married in the US while my wife was on vacation, but we never got around to registering the marriage in her home country - dealing with all the bureaucracy was a pain.

(d) non American companies don’t pay as much and my line of work requires me to “live” at the job place + I’m building the pension with the Union I work for …that’s why it makes more sense to fly back and forth.

But being eligible for MFJ + standard deduction + FEIE would save me a a really good amount of money off the federal taxes I pay.
(e) would her foreign income be subject to SECA/FICA even after the FEIE?

[pk]

@user17672869738 , I understand your situation.

On the question of  FICA/SECA --- absent a totalization agreement   between US and your spouse's home country ( please tell me the  country or you can  google or visit Social Security Admin  regarding "totalization agreements), she will have to pay SECA -- she is considered  self-employed for purposes of SSA and Medicare.

Just for your reading pleasure , please see the statute here -- applicable section is 6013(g)-->

26 U.S. Code § 6013 - Joint returns of income tax by husband and wife | U.S. Code | US Law | LII / L...

Is there more I can do for you ?