Dual Status Filing

[aradwan2]

Hi,

I am going to file as a Dual status. I and my wife were non-residents from Jan to Oct 2021 and then residents at the end of the year. We will apply for extension and then wait through 2022 to file. 

I know that I will have to use 1040 as the main return and 1040NR as the statement. 

My question is regarding the form 1040 for the part of the year where we are residents, should we file jointly? or married filing separately? 

Thank You!

[Vanessa A]

It depends on your particular situation.  Generally, it is better to file jointly, as several credits and deductions are not available to those who file separate. For instance, earned income and education credits cannot be taken if you file a separate return.  If you wanted to itemize your return, you both have to itemize.  You cannot use the expenses twice so one of you may end up having zero or minimal deductions while the other one takes the itemized deduction.  

 However, some people would still rather file separate because their situation makes it better for them to file separately.  One big instance, is those using Income Based Repayments for student loans. A monthly payment may be lower for someone filing separate. 

One thing you can do is to use The Tax Estimator to see what is best in your situation.

[aradwan2]

Thank you for the quick response.

I know, in my situation, that filing jointly is better but I am confused with the following instructions of dual status from IRS:

• You cannot file a joint return. However, a dual-status alien who is married to a U.S. citizen or a resident alien may elect to file a joint return with his or her spouse. Refer to Nonresident Spouse Treated as a Resident for more information.

this bullet is confusing and so I am not sure if we can file jointly for the part of the year when I and my wife were residents? 

P.S. We won't do the first year choice either. The best situation for us is just dual status. 

[ErnieS0]

If I understand your situation from your original post @aradwan2, both you and your wife are filing as US residents under the first-year choice.

In that case, you can filed as married for the whole year. The IRS uses your marital status on 31 December as the marital status for the whole year.

The choice for a nonresident spouse to be treated as a resident refers to the situation when one spouse is a US citizen or resident at year-end and the other is a nonresident. This does not apply to you since you have chosen to both be treated as US residents.

In that case of a nonresident spouse, the couple can elect to file as US residents for the whole year and report their worldwide income for US taxation. This is not a dual-status return.

[aradwan2]

Thank you so much. We have decided to file as just "dual status" and we won't file as residents for the entire year. We will file as residents for October-December using 1040 (main return) and non-residents from Jan-Sep using 1040NR (statement). My questions is: when we file 1040 for Oct-Dec, can we file jointly? 

I am confused with the following statement:

• You cannot file a joint return. However, a dual-status alien who is married to a U.S. citizen or a resident alien may elect to file a joint return with his or her spouse. Refer to Nonresident Spouse Treated as a Resident for more information.

[DianeW777 · Accepted solution]

Yes you can file together. It is my understanding that both you and your wife individually met the residency requirements independently by each using the first-year choice. As our awesome tax expert @ErnieS0 indicated.

• You cannot file a joint return. However, a dual-status alien who is married to a U.S. citizen or a resident alien may elect to file a joint return with his or her spouse. Refer to Nonresident Spouse Treated as a Resident for more information.
  • Your spouse is not a nonresident at the end of the year.

Resident Alien at End of Year

You must file Form 1040, U.S. Individual Income Tax Return if you are a dual-status taxpayer who becomes a resident during the year and who is a U.S. resident on the last day of the tax year. Write "Dual-Status Return" across the top of the return. Attach a statement to your return to show the income for the part of the year you are a nonresident. You can use Form 1040NR, U.S. Nonresident Alien Income Tax Return or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents as the statement, but be sure to write "Dual-Status Statement" across the top.