Filing Status: Married Filing Jointly vs Separately

[Opus 17]

@please_help 

"While I may be wrong, I interpret "neither spouse can make this choice again in any later tax year, even if married to a different individual – it is a once-in-a-lifetime choice" as meaning that the choice "to treat the nonresident spouse as a U.S. resident for tax purposes" cannot be replicated after the presence of any scenario under the article's "Ending the Choice" paragraph. Earlier in the article reads the following:"

This relates to the choice to treat your non-resident spouse as a US resident for tax purposes.  This gets you a lot of US tax benefits, because when you are married filing separately, your tax rates are higher and a lot of deductions and credits are reduced or disallowed.  If you chose to treat your non-resident spouse as a US resident, that choice is generally irreversible, except for certain circumstances.  If you do fit one of the circumstances, and reverse the choice, you can never again choose to treat a non-resident spouse as a resident to get the tax benefits of filing jointly.  

Consider this scenario.  In 2024 your spouse does not work and you choose to treat her as a US resident. She must report all her world-wide income, but she has none, so you get all the benefits of filing jointly and it costs you nothing.  In 2025, she sells some property in her home country for an enormous capital gain that would drastically increase your US tax, so you decide to reverse the choice and file separately.  Since she is not a US resident, she does not have to report the capital gain and pay US tax on foreign income.   Then in 2027, she is back to having no income, so you want to file jointly.  You can't, because you can't take that choice a second time. 

However, that rule only applies as long as your spouse is a non-resident alien.  If she becomes a resident alien, green card holder or US citizen, then all her worldwide income is always subject to US tax, whether she files jointly or separately, and you have the same ability to file jointly or separately as any other married couple under US laws (citizens, green card holders and residents).  

Knowing those rules, if you decide to treat your spouse as a US resident for tax purposes, go ahead.  Follow the procedure to file a joint return and apply for an ITIN.  In the future, you should be able to use the ITIN to e-file.  Just remember that if you make that choice, then all your spouse's worldwide income is subject to US taxation, even if it is earned and paid in a foreign country.  And if she applies for permanent status, one of the questions on the interview is "have you paid any and all US income tax that you have owed?"  And if you do decide to end the choice before she gets residency status, you won't be able to make the choice again for her or a different future spouse.  

[please_help]

Thank you for your clarifying response, Opus 17. The distinction in the "irreversible" choice is the spouse's location, non-resident vs. resident. If non-resident, the choice to classify as a US resident for tax purposes is generally irreversible; if a resident, then we may file jointly or separately as we like...though projecting my spouse with no meaningful income throughout our lifetimes, filing jointly seems the best path forward - both now (while we are separated) and when we may be reunited (praying in late 2026).

[Opus 17]

---

@please_help wrote:

Thank you for your clarifying response, Opus 17. The distinction in the "irreversible" choice is the spouse's location, non-resident vs. resident. If non-resident, the choice to classify as a US resident for tax purposes is generally irreversible; if a resident, then we may file jointly or separately as we like...though projecting my spouse with no meaningful income throughout our lifetimes, filing jointly seems the best path forward - both now (while we are separated) and when we may be reunited (praying in late 2026).

---

Yes, I think we have a common understanding.  The irreversibility part applies to a non-resident alien spouse.  Once the spouse is a US resident (passes the substantial presence test), or has a green card, or is a citizen, that rule does not apply and you follow all the normal rules that apply to US residents and citizens. 

[please_help]

Opus 17,

Follow-up question:

When I print and sign the federal tax return, complete/sign the Form W-7 ITIN application, and mail everything to the IRS address for ITINs, how do I go about filing my state income tax return without my wife's ITIN? Do I simply wait for an ITIN document to be mailed to me before e-filing my state income tax (or mailing it, too)?

[Opus 17]

---

@please_help wrote:

Opus 17,

Follow-up question:

When I print and sign the federal tax return, complete/sign the Form W-7 ITIN application, and mail everything to the IRS address for ITINs, how do I go about filing my state income tax return without my wife's ITIN? Do I simply wait for an ITIN document to be mailed to me before e-filing my state income tax (or mailing it, too)?

---

Probably the best to do is to file a request with the state for an extension, then when you get the ITIN, add it to the state tax return and file it.  You will probably have to file by mail, since generally, state returns can't be e-filed unless you also e-filed the federal return.  But this is also a one time thing, if your wife is still a non-resident alien next year, you can use the ITIN to e-file both returns. 

[pk]

@please_help , agreeing with my colleague @Opus 17  in that you may want to seek an extension for the filing of the state return ( you still need to pay any state tax liability by the  usual due date  of 15th of April ),  you can indeed file your  state return ( also by mail , just like the federal ) when you file the federal -- just attach a copy of the federal  return and the W-7  ( not the attachments ).  This tells the  State that a request for ITIN is in the process  and therefore they will hold off  processing till ITIN  is issued and the federal return processed.  Note that federal return processing will also be on-hold till the ITIN issuance is in effect.  

 You just have to let the process work its way through.  Only thing that  is certain that  any taxes  paid with the returns will be processed  in  parallel.

Is there more one of us can do for you ?

[please_help]

Thank you for your continued guidance, Opus 17 and pk.

My non-resident alien wife has mailed to me the following:

1. Signed and dated IRS Form W-7
2. Signed IRS non-resident alien spouse statement

3. Signed and notarized IRS Form 2848 (Power of Attorney and Declaration of Representative)
4. Original Philippine passport

I will meet with an authorized civilian at a tax preparation center who will create a certified passport so I do not have to mail the original and wonder when it is will returned to my spouse's foreign address.

Adding another wrinkle: I received a corrected consolidated 1099 for my brokerage. Previously, I "printed" our original federal and state income taxes but not mailed them as I wait to meet with the designated passport certifier. Unable to delete my original tax return in TurboTax, I was forced to amend our federal and state tax returns. TurboTax limits the space available to explain why tax returns are amended, but if a rational human reads the blocks they will understand that no original returns were mailed.

The plan forward:

1. Meet with the tax professional to certify my spouse's original passport

2. Mail the W-7, IRS non-resident alien spouse statement, notarized 2848, amended federal income tax return, and certified passport to the IRS ITIN office

3. Mail the W-7, amended federal income tax return, IRS non-resident alien spouse statement, and amended state income tax return to the state

4. Return the original passport to my non-resident alien spouse

5. Pray for a miracle!

Note: No taxes are due: I am to receive a small federal refund; state is $0

Per my call to the IRS ITIN office, it is backed up 3+ months. I would love NOT filing an extension for the state; if the state will accept only the items identified in #3 above, it would allow my wife to change her middle and surname (we are waiting until after our taxes are accepted)...however, like the federal income taxes, the signature block does 'require' both signatures for a "Married, filing Jointly" return and I do not have a spouse-signed & notarized Power of Attorney and Declaration of Representative (IRS Form 2848) for the state. I suspect I will have to locate the state equivalent form and have my wife mail the signed/notarized version in order to file with the state.

[DaveF1006]

Even though your wife doesn't live in the US or earn income, you may still file Married Filing Jointly regardless.