Expat. Wife is Korean. She's never been to US. Can't e-File?

[shanesnh]

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.

[shanesnh]

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". 

[pk]

@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

[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 ?