I am a US citizen living in Europe long term. My wife is a European citizen with no ties to the US. We got married in 2019 and are still living in Europe.
For the tax year 2019 I filed as 'Married Filing Separate' as we were not ready to file a joint return. The tax treatment was quite disadvantageous in my view.
For the tax year 2020 we are now ready to file 'Married Filing Jointly' reporting our worldwide income. I have requested an extension until December 15 and will be paper filing by mail with:
- a request for an ITIN for my spouse using form W7 and certified copies of her passport
- statement requesting treatment as US residents for 2020 (and later years) for tax purposes
I've also gone back to TurboTax 2019 and started an amended return to change the filing status to filing jointly and see that we can get a large refund vs. my original MFS filing.
Questions are:
1) Do I paper file my 2019 amendment alongside my 2020 return or wait for the ITIN to be issued?
2) Our statement requesting joint filing states "we request for joint filing for 2020 as the first year per IRC 7701 (b)(1)(A)". Will this statement / choice block my ability to amend filing status for 2019 in any way?
thank you
1) Do I paper file my 2019 amendment alongside my 2020 return or wait for the ITIN to be issued? You must wait for the ITIN to be issued.
2) Our statement requesting joint filing states "we request for joint filing for 2020 as the first year per IRC 7701 (b)(1)(A)". Will this statement / choice block my ability to amend filing status for 2019 in any way? If you are going to choose to file jointly then all her income must be included even on the 2019 return ... change the election year to 2019 and when you mail in the amended 2019 return also send a copy of that election.
FYI ... mail the 2020 return with the W-7 form to the W-7 address NOT to the 1040 address.
1) Do I paper file my 2019 amendment alongside my 2020 return or wait for the ITIN to be issued? You must wait for the ITIN to be issued.
2) Our statement requesting joint filing states "we request for joint filing for 2020 as the first year per IRC 7701 (b)(1)(A)". Will this statement / choice block my ability to amend filing status for 2019 in any way? If you are going to choose to file jointly then all her income must be included even on the 2019 return ... change the election year to 2019 and when you mail in the amended 2019 return also send a copy of that election.
FYI ... mail the 2020 return with the W-7 form to the W-7 address NOT to the 1040 address.
@Critter-3 Thank you so much for this reply!
I will amend the election letter as you propose to say 2019 and include it with my 2020 return and again when I send the 2019 amendment after getting the ITIN.
Now that my spouse and I have agreed to joint filings, it's no problem to include her 2019 income when amending.
Point noted on correct w-7 address as well.
Related to this, we take the Foreign Tax Credit and I suspect after the 2019 amendment my carry forward numbers calculated on the 2020 return will no longer be valid. As I always have a carry forward amount, I am hoping I can simply recalculate the table when doing my 2021 return. Are there other considerations I should take into account?
STOP ... amend the 2019 first if you have something to carry forward to the 2020 return (even if you will file the 2020 return first) so the carryforward will be correct. If you don't then the 2020 return will also need to be amended ... a waste of time and effort.
Once the ITIN is issued mail in the amended return ... it will take months to process but the 2020 return will as well so don't expect a quick turn around on either return.
Another FYI ... you may be able to efile the 2021 return but you will need to use ZERO for the 2020 AGI since the 2020 return is being filed late.
@Critter-3 Thank you once again! You've just saved me a lot of trouble and I very much appreciate it.
To confirm the right steps:
1. Input NRA spouse income, foreign tax paid etc. and any other corrections and finalize 2019 amended return in Turbotax first.
2. Take carry forward Tax Credit numbers from 2019 return and input into 2020 return. For me there is the normal carry foward table as well as an AMT version. I had to pay AMT in 2019 when I filed MFS.
(for the past few years I've always had a carry forward amount)
3. File 2020 now by mail
4. File 2019 by mail after ITIN is issued