I recently got married in Mexico to a Mexican national. He does not live or work in the US and I am self-employed but work in the US. His income this year was minimal and I was hoping to file MFJ to in order to take advantage of the greatest deduction. I have several questions - first, does this sound like the most sensible way to reduce what I owe? I am also the primary financial support for my stepson and have been for two years. Second, if I do file MFJ, how do I procure an ITIN for my husband since he does not have an SSN? Third, would he still have to file US taxes, given that his income in 2022 will be under the minimum filing requirements? Thank you!
In general, in order to file MFJ, you have to make an election to treat your spouse as a US resident for tax purposes. This means you must include all their world-wide income on your joint US tax return and pay US tax on it. (You can claim a deduction or credit for any taxes your spouse pays in Mexico on the same income.). Your spouse needs an ITIN, international tax ID number. You get this by filing your tax return by mail on paper, and include a form W-7 (ITIN application) along with any proof required by the W-7 (like a passport or birth certificate). Mail it all to the address on the W-7 instructions. After the IRS issues the ITIN and returns the documentation, they will process the tax return. You can't apply for the ITIN separately from the tax return.
However, the US has a tax treaty with Mexico and I don't know if it modifies those general rules. You may want to consult a CPA with expertise in taxes for foreign residents.
https://www.irs.gov/forms-pubs/about-publication-519
https://www.irs.gov/individuals/international-taxpayers/tax-treaties
Or, file married filing separately and omit your spouse's income from your tax return.
Hello geminagl,
If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a U.S. resident within the meaning of Internal Revenue Code (IRC) section 7701(b)(1)(A) and the other is not, you can choose to treat the nonresident spouse as a U.S. resident for tax purposes. This includes situations in which one of you was not a U.S. resident at the beginning of the tax year but was at the end of the year, and the other was not a U.S. resident at the end of the year.
If you and your spouse do not choose to treat the nonresident spouse as a U.S. resident, you may be able to use head of household filing status. To use this status, you must pay more than half the cost of maintaining a household for certain dependents or relatives other than your nonresident spouse.
If you decide to do a joint return with your spouse then the steps to follow are in this link - Nonresident Spouse - IRS
We would need more information about your step-son to be able to determine if you qualify as Head of Household, if you decided to go this route instead. Here is a link that will help you in determining if your step-son is a 'qualifying person' for the Head of Household filing status - What is a "qualifying person" for Head of Household?
Best regards,
Gabriela
first, does this sound like the most sensible way to reduce what I owe?
It could be, but it depends on your spouse's other income.
I am also the primary financial support for my stepson and have been for two years.
Once married, you have the same legal right to claim your stepson as a dependent as a biological parent. If you file a joint return, your son is your dependent, because your son lived with at least one spouse. If you filed separately, the son is not your dependent unless the son actually lived in your home.
Second, if I do file MFJ, how do I procure an ITIN for my husband since he does not have an SSN?
Include a W-7 application with your tax return and file by mail.
Third, would he still have to file US taxes, given that his income in 2022 will be under the minimum filing requirements?
If you file a tax return for any reason, you must report all your income, no matter how small. If you file a joint return with your spouse, you must report all your own income and all your spouse's income, no matter how small. The filing threshold is joint and based on your combined total income.
If you do not make the election to treat your spouse as a resident for tax purposes, then your spouse would file a non-resident tax return to only report US-sourced income. If they do not live or work in the US, they probably don't have US-sourced income, except for some rare exceptions.
Thank you, Gabriela. My stepson is 10 years old and has lived with us full-time for over a year. It would appear as though that would qualify me to file as head of household, given the information in the link you sent?
If the other test (age and unmarried -probably so since he is 10 😁) are meet then yes you could qualify as Head of Household. Remember you must also have paid more than half the cost of keeping up the home in which your dependent and you lived in.
Here is another article that you can also reference for this:
Thank you! I have some follow ups to your comments below.
It could be, but it depends on your spouse's other income.
My husband's income is under 25% of mine for the 2022 tax year, so this is why I had thought MFJ might provide the most benefits.
Include a W-7 application with your tax return and file by mail.
Just confirming there is no way to file this application online or ahead of the 2022 filing?
If you do not make the election to treat your spouse as a resident for tax purposes, then your spouse would file a non-resident tax return to only report US-sourced income. If they do not live or work in the US, they probably don't have US-sourced income, except for some rare exceptions.
This information relates to MFS, correct?
Yes, he is unmarried 🙂
For payments made towards keeping up the home, what type of payments qualify? My husband owns the land we live on and the temporary mobile home we live in while we build our house, so we do not have a mortgage or rental payments. I currently pay for all living expenses for my stepson, such as food and school-related items.
If you file as MFJ, then you will need to file Form W-7 with the IRS to apply for an ITIN. The Form W-7 requires documentation substantiating foreign/alien status and true identity for each individual. You may either mail the documentation, along with the Form W-7, to the address shown in the Form W-7 Instructions , present it at IRS walk-in offices, or process your application through an Acceptance Agent authorized by the IRS.
Thought I would also reference the standard deduction for married couples filing jointly for tax year 2022 rises to $25,900. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, and for heads of households, the standard deduction will be $19,400 for tax year 2022.
If you file MFJ make sure each spouse reports their entire worldwide income for the year you make the choice and for all later years unless the choice is ended or suspended. So your spouse would report all his income even though the amount is only 25% of your income it will still need to be reported.
'If you do not make the election to treat your spouse as a resident for tax purposes, then your spouse would file a non-resident tax return to only report US-sourced income. If they do not live or work in the US, they probably don't have US-sourced income, except for some rare exceptions.' This is relates to Nonresident Aliens filing requirement, I would suggest looking at 'who must file' section for this.
@geminagl wrote:
Thank you! I have some follow ups to your comments below.
It could be, but it depends on your spouse's other income.
My husband's income is under 25% of mine for the 2022 tax year, so this is why I had thought MFJ might provide the most benefits.
Include a W-7 application with your tax return and file by mail.
Just confirming there is no way to file this application online or ahead of the 2022 filing?
If you do not make the election to treat your spouse as a resident for tax purposes, then your spouse would file a non-resident tax return to only report US-sourced income. If they do not live or work in the US, they probably don't have US-sourced income, except for some rare exceptions.
This information relates to MFS, correct?
My husband's income is under 25% of mine for the 2022 tax year, so this is why I had thought MFJ might provide the most benefits.
Here again, the issue is that if you make the election to treat him as a US resident for tax purposes, then you must report his income on your joint US tax return which will raise your tax, possibly by more than the increased deductions. If he pays tax in Mexico, you can claim that as a credit to offset the increased US tax. The only way to really know for sure in your situation is to test different combinations. (Also note that if he applies for a green card or citizenship, one of the questions is "have you accurately reported any prior US income and paid your income tax?")
Just confirming there is no way to file this application online or ahead of the 2022 filing?
Per the instructions, the applicant needs a financial connection to the US. Filing a joint tax return with a US person creates that connection. Starting a business in the US might also create such a connection, and there are a few other rules. Check the instructions to form W-7. In general, he won't have a financial connection to the US until you file the joint return so you can't apply until you file the joint return, but you may qualify for an exception.
This information relates to MFS, correct?
Correct, if you file MFS, your spouse does not file any US tax return, unless they have what is considered "US-source income", in which case they file a non-resident tax return form 1040-NR also as married filing separately.
I want to add a note about dependents.
First, I don't believe you qualify to file as HOH, because you said you live together with your spouse. This disqualifies you from filing HOH (to the best of my knowledge) even if your home is outside the US or your spouse is a non-resident of the US.
Second, you don't qualify for the $2000 child tax credit unless the child has a social security number at the time you file an on-time tax return. If your child is not eligible for an SSN or your don't get one in time, they will only be eligible for the $500 credit for "other dependents". If your child IS eligible for an SSN via citizenship or a green card, you should delay filing your tax return until it arrives. If you need to delay past April 15, make sure to file an extension request so your tax return will be considered "on time."
Lastly, to claim your child as a dependent, your child also needs an ITIN, which means if you file a joint return listing your spouse and child, you will need to include 2 separate W-7 applications with the required documentation.