I know this question has been asked but there is about 100 different conflicting answers. I have found TurboTax's own answer but many say it doesn't work and that other companies (TaxAct, etc.) work just fine to e-File with a Non-Resident Alien (NRA) spouse but TurboTax just errors out.
You can find what they say here under the "Married Filing Separately with a nonresident alien spouse" section: How should I file my taxes if my spouse is a nonresident alien? (intuit.com)
I'd like to e-File if possible. If I have to waste my money printing it out and sending it overseas for no reason besides Intuit's inability to fix a bug that's been in their program for a decade (whereas TaxAct, H&R Block, and others have no issue), it's annoying. I would change to another but some are more expensive and/or TurboTax imports my previous stuff. I don't even know why I have to file these stupid returns when I end up with a $0 balance each time due to FEIE.
Anyway, please let me know. Thanks.
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And NO, we are NOT being stupid and getting her an ITIN when she has never even set foot on US soil. Her income is NEVER to be taxed by the US just because she married a US expat. So, it's "Married Filing Separately".
@shanesnh having gone through both your posts on this thread:
(a) To be able to use FEIE ( with a Foreign Tax home ) to mitigate the effects of double taxation { per your statement your US Tax burden is Zero ) you need to file a Federal Return. As a US Person ( Citizen/ GreenCard ) you are required by law to recognize your world income which you do by filing a tax return.
(b) You are also , as a US person under the FICA/SECA obligations . However, because South Korea and US have a Totalization agreement in effect, you need to pay FICA/SECA to only on e country . You do this by submitting a certificate of Participation ( from the country you participate in ) to the Non-Participating country. This also implies that your Govt. pension ( Social Security or its equivalent ) is paid by that country and taxed ( generally ) only b y that country.
( c) Unless your NRA Spouse wishes to expose her world income to US taxes ,
1. She does not need a TIN ( in her case ITIN ) and therefore no need to file by mail along with the W-7 application and the supporting documents.
2. You can only file as MFS (Married Fling Separate ) which will need you to file by mail -- because TurboTax ( and IRS ) requires details of the Non-Fling Spouse -- Name, TIN, etc. The only way to do this is to satisfy the software error checks by using a dummy TIN ( for the non-filer ) and then print and replace this with "NRA". That is why the need for filing by mail. Note that the IRS XML definition of the fields of the form 1040 expects a Numeric field for TIN. Therefore Tax software generally check for valid TIN ( and this would be disabled for allowing entry like NRA . When processing paper returns there is a curative process with human intervention.
(d) It would be interesting to confirm and understand how the other Tax Software ( you mentioned ) achieve allowing NRA in numeric field --- perhaps lowering the checks to allow a number like 000-00-0000 or similar reserved number stream, at the expense of entry error checking. Obviously it is possible
Hope this answers your query . Is there more I can do for you ?
pk
@shanesnh , adding to my reply above, I have simulated your situation on my windows download / CD version of Home & Business and below are what I found:
(a) as mentioned above the lack of a numeric TIN fails TIN check ( thus NRA would necessitate "file by mail ". So my statements above stand.
(b) Foreign Unemployment benefits should be entered as unemployment benefit ( shown on line 7 of S chedule-1 ). The method proposed by @rjs in an earlier response achieves the correct result but does not correspond to IRS dictum/suggestion on Pub 525 ( taxable and Non-Taxable incomes ). Also the source of the "unemployment benefit may make it fully or partially taxable income. However what I gather from a quick reading of Korean Unemployment grant scheme appear to be a benefit based on age/employment and contribution to Korean "Social Security" equivalent. TurboTax accepts this entry -- you just have to pretend that this is from a state ( and leaving the state name blank) . It passes all the checks.
Is there more I can do for you ?
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