Consequences of electing to treat non-resident alien spouse as resident for tax purposes

[vale007]

I am a US citizen living abroad and married to a Non-Resident Alien.

I have filed taxes as HoH status before as we have dependent children.

However, we're needing to get an ITIN for my spouse for bank and insurance reasons and are considering filing MFJ this year. 

I have researched this, and I understand we can file jointly and elect to treat my spouse as a resident for tax purposes and report his worldwide income. Since we live abroad, we can also take the foreign earned income exclusion up to the $107,600 limit for 2020. Since his worldwide income is less than this limit, there is actually no change in our total taxes. In fact, our taxes are the same whether I file as HoH or if we file as MFJ since most of our income is excluded with the foreign income exclusion.

Am I correct so far? Are there any other implications of electing to treat a spouse as a resident that I'm missing?

Thank you!

[ThomasM125]

My only reservation is that the head of household filing status is mostly for individuals who are not married or married but living apart from their spouse. So, it would be safer to file as married-joint and therefore recommended, especially if the tax will be the same either way.

While it is true you may qualify for HOH status if married to a non-resident, you also must comply with the other requirements of HOH status, such as furnishing more then 1/2 the cost of a household in which your dependent lives.

[Edited 2/19/21 2:13 PM PST]

@vale007

[vale007]

Thanks @ThomasM125 , but HoH can be used in this scenario safely. 

Per the IRS: "If you are a U.S. citizen married to a nonresident alien, you may qualify to use the head of household tax rates. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. However, your spouse is not a qualifying person for head of household purposes. You must have another qualifying person and meet the other tests to be eligible to file as a head of household."

https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad-head-....