Hello! My wife lives and works in the UK while I lived and worked in the US until Nov 2019. I now live in the UK. Do you recommend we file together or separately?

[DianeC958]

Typically for US tax purposes, it is more advantageous for you to file as Married Filing Joint.

Your wife will need an ITIN or Social Security number so you can file your US tax return.  On a Married Filing Joint Return then your wife is considered a resident of the US for tax purposes.

If you file as Married Filing Joint you will claim all of your wife's  income on the tax return as Foreign Earned Income which can be excluded from US taxes us to $105,900 for 2019.

Here on instructions on how to claim the Foreign Earned Income Exclusion

To enter Foreign Earned Income -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Less Common Income
• On Foreign Earned Income and Exclusion, click on the start or update button

Or enter foreign income in the Search/Find box located in the upper right of the program screen.  Click on Jump to foreign income

Link Foreign Earned Income Exclusion

Your other option is to file as Married Filing Separate.  If you chose this you only include her name and Social Security number (or ITIN) on your return.  I have included a link on the disadvantages of Filing as Married Filing Separate.

If you do file as Married Filing Separate then you do not report your wife's income on your tax return.

Link for Married Filing Joint vs Married Filing Separate

[omegaalpha84]

Hello,

Thank you kindly for the reply and recommendations. As for filing “Married filing joint”, where my wife is considered a US resident, would she then also need to file twice? Both in the US and UK? Please advise. Thank you. 

[LinaJ2020]

Is your wife a US citizen or green card holder?  

If she is a US citizen or resident, she is required to report worldwide income including those she earned in the UK on her US tax return.  You will have to check if she meets the filing requirements for the UK.  We do not have information about whether she is required to file or not overseas. 

If she meets the US filing requirements, she must file a US tax return.  If she pays taxes to both the US and UK tax authorities, she is allowed to claim a foreign tax credit on the same amount of wages she reports on both her US and UK tax returns.

To claim a foreign tax credit on a Form 1116, in TurboTax Self-employed online, here are the steps:

• Open up your TurboTax account and select Pick up where you left off
• At the right upper corner, in the search box, type in "foreign tax credit" and Enter
• Select Jump to foreign tax credit
• Follow prompts

You might be able to claim a foreign earned income exclusion if qualify, see the answer from DianeC958 above.  If you did exclude your foreign earned income on your taxes, you cannot claim the foreign tax credit on the same excluded amount.  IRS does not allow double-dip.

@omegaalpha84