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Marriage, change job, buy a house

I have three primary inquiries regarding my upcoming year's taxes. Firstly, I recently got married, and my husband resides outside of the USA with no intention to move here. I'd like to know how I should go about filing my taxes under these circumstances.

Secondly, I've undergone a change in my employment and relocated from Texas to Mississippi. I'm curious about how this move might affect my tax situation.

Lastly, with the change in my job, I've also purchased my first home and now have a mortgage. I'm interested in understanding what expenses may qualify for deductions at both the state and federal levels in Mississippi.

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3 Replies

Marriage, change job, buy a house

1. If your spouse is a US taxpayer (citizen, green card holder or resident alien) then you follow the normal US tax laws. Your spouse is required to file a US tax return and report and pay US tax on all his world-wide income.  He may get a credit or deduction for taxes paid in a foreign country.

 

If your spouse is not a US taxpayer (not a citizen or green card holder, lives in the US less than half the year and does not pass the substantial presence test), then you have two choices.

a. File as married filing separately.  You only report your own income and deductions.  Note that MFS has higher tax rates and some deductions and credits are reduced or not allowed.  When you are asked about your spouse's tax ID number, you need to write "NRA" (non-resident alien) in the spot for the tax number.  Under current procedure, you can't e-file.  You need use a fake SSN to get through the interview and print your return.  Then cover the fake SSN with white-out, write in NRA, and sign, print and email your return.  

 

b. Your spouse elects to be treated as a US taxpayer.  You can file married filing jointly.  Filing jointly has lower tax rates and some deductions and credits are more valuable, but you must include all your spouse's world-wide income.  You can claim a credit or deduction for taxes he pays on the same income to a foreign country.  For the first year, he needs to apply for an ITIN, international tax ID number.  To do this, you print and sign the tax return, and you also fill out a form W-7 ITIN application. Mail the tax return, the W-7, and the proof of ID required, to the address for the W-7.  After the IRS issues the ITIN, they will process the tax return.

 

There is no way to know whether filing jointly or separately will result in lower taxes without examining your exact situation, your spouse's other income, and so on. 

 

2. Moving expenses are not deductible unless you are in the military.  I can't think of any other specific tax issues related to moving.  Texas does not have state income tax, but Miss does, so you will need to have Mississippi state taxes withheld from your paychecks.

 

3. Mortgage interest and property taxes (real estate taxes) are deductible, with some limitations.  

 

a. Mortgage interest will be reported to you by the lender on a form 1098 that they send you in January.  Note that when you closed on the home, you probably paid daily interest to the end of the month on your closing statement.  That interest is also deductible, but it might not be included in the total on the 1098.  Check your statements and if the daily interest from the closing is not already included, you can add it.  

 

b. You can deduct property taxes.  They will also be on form 1098 if the lender paid from escrow.  However, you deduct taxes for all the days you owned the home, even if you didn't pay them directly.  For example, suppose that the seller paid taxes on January 15, 2023 that covered all of 2023, and you closed on the home on June 29.  You probably paid the seller a tax adjustment at closing, for June 29-Dec 31, the days that they prepaid but that you will own the home. That amount is also considered deductible property taxes as if you paid them directly to the city or county.

 

c. If you paid discount points on the mortgage (to get a lower rate) they are considered mortgage interest and you can deduct those all at once, or over the life of the loan, depending on certain factors discussed here.

https://www.irs.gov/forms-pubs/about-publication-936

 

d. Some other closing costs, like title fees and transfer (stamp) taxes, are not deductible but can be added to the cost basis of your home.  Keep track, because this will reduce your capital gains when you sell.  See here for a list.

https://www.irs.gov/forms-pubs/about-publication-523

Marriage, change job, buy a house

Thanks for your answer. 

If I purchase a property on my own and am the sole owner (even I got married), can I qualify as the head of the household?

Marriage, change job, buy a house


@Cathy Cao wrote:

Thanks for your answer. 

If I purchase a property on my own and am the sole owner (even I got married), can I qualify as the head of the household?


Head of household is a special status intended for single parents and similar situations.  If married, your spouse must not live in your home even 1 day during the second half of the tax year (from July 1-Dec 31), and you must pay more than half the cost of keeping your home, and you must provide care in that home for a qualifying person, usually your dependent child.  

 

I don't think you mentioned whether or not you have children.  Also, your spouse would not be able to visit you in your home during the second half of the year (you could visit his home, he can't visit yours). 

 

If you qualify as head of household, you don't need a spouse's tax number or to write "NRA" on the return,  and you can e-file.

 

 

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