I am an Indian Citizen and currently on H1B. I recently got married on 4th Dec 2016.My wife will not be coming to US before 31stDec'2016. What should be my filing status?

[jiggs224]

I am an Indian Citizen and on H1B visa (Resident Alien) for past 4 years. I recently got married on Dec 2016 in India. My wife has never been to US and will not be coming to US before 31st Dec'2016. She does not have SSN or ITIN. She is planning to come as soon as she gets her dependent visa. 

At present she does not have passport as well. So it will take some time to get her passport and then dependent visa.  If I file jointly then I believe ITIN is required of my wife which I do not believe I would be able to apply as she does not have passport, nor any US visa yet. 

Hence my questions:

A. Can you advise if I should be filing Married jointly or separately? Do I need ITIN to file tax returns this year? 

B. My wife does file IT returns in home country which is non-taxable because her income is below taxable income threshold. How does she report her income back in India? Does she has to report in US? 1. If her income needs to report in US if filing jointly or separately in any case, I believe only her income after our marriage date of Dec 2016 is needed to be reported? 2. Please provide guidelines on filing tax returns if she has to report in US. 

C. Can you provide guidelines on how to get ITIN for my Wife as she is not in US.

D. Kindly suggest best possible way to file returns and provide appropriate solution so that I can meet filing deadline and file in appropriate status.

[bine22 · Accepted solution]

You can file jointly or separately. The least paperwork would be to file separately by mail and write NRA in the box for the SSN of your spouse. But that might not be the best option moneywise.

If you file jointly, you do need to apply for an ITIN for your spouse. She doesn't have to be in the US for that nor does she need to have a visa. If she has no passport, you can use 2 other types of documents listed in the instructions for form W7: https://www.irs.gov/instructions/iw7/ch01.html

If you file jointly, you also need to attach a statement that you both choose to treat your wife as resident alien. That means, she will also have to report worldwide income for the entire year. She can use the foreign paid tax credit of foreign earned income exclusion to avoid double taxation.

We can not tell you, which way is better. You would have to report your return both ways and see if filing jointly gives you enough benefit to make all the paperwork worthwhile. 

Have a look at publication 519: https://www.irs.gov/publications/p519/

[jiggs224]

Thanks bine22 for prompt response. I do have a couple of followup question.
1. If I file separately, how does she report her world wide income? Does she need to if filing separately?
2. If I file jointly, how does she report her worldwide income?
Any guidelines would be appreciated.

[bine22]

1. Since she is not a resident alien she is not required to report her income to the IRS. That would only apply, if you choose to treat her as resident alien to file jointly.
2. If you file jointly you report all income on one return. You would enter her income under "less common income" - "Foreign earned income"

[jiggs224]

Thank you, Appreciated!