It will depend on whether you are electing to file your return using Married Filing Separate (MFS) status or Married Filing Jointly (MFJ).
If filing using MFS, applying for a Tax ID (ITIN) for your spouse is optional - to file without it, you can ignore the errors in TurboTax and print the return.
After printing the return, write in "NRA" for her social security number and mail the return to the address on the cover sheet that TurboTax prints with your return. You cannot file your return electronically unless you qualify to file using the Head of Household filing status. (See this link for more information: Head of Household status when spouse is a Nonresident Alien.)
To be able to file electronically in the future, you may wish to apply for an ITIN for your spouse when filing your return this year.
If you are filing jointly with your spouse, you must request an ITIN, and there are some other considerations.
Here is some additional information about both options.
Married Filing Jointly with a nonresident alien spouse
If you choose this option, you will need to include ALL of your spouse's worldwide income on your tax return. This income will then be subject to US tax. However, you may be able to take credits for any taxes your spouse paid on the foreign income. To file jointly with your spouse, you will follow these steps:
- Prepare your return as you normally would in TurboTax. Enter your spouse's name and ignore the errors regarding missing SSN/ITIN. Select "File by Mail" rather than e-File in the last step of your return.
- Print your return to mail into the IRS.
- Attach a statement to your return, signed by both of you that states that one of you is a US citizen, and the other is a nonresident alien and that you are electing to both be treated as US residents for tax purposes. Include the full name and address of each spouse on this letter, as well as your social security number. (Note: this does not affect the nonresident alien's immigration status.)
- Fill out Form W-7 (You can find it here: Form W-7) and attach this form, as well as all necessary documentation, to the tax return.
- Mail the return to the address specified in the instructions for Form W-7 (found here Form W-7 instructions).
Married Filing Separately with a nonresident alien spouse
If you do not elect to treat your spouse as a resident for tax purposes, you do not have to include her income on your return. However, you will have a lower standard deduction, and you may not be able to claim certain other tax benefits. To file using this status and apply for an ITIN, follow all of the same steps above except step 4, attaching the statement to make the election to be treated as a resident alien.
The IRS will process your return and issue an ITIN to your spouse. After this year, you will be able to file your return electronically using your spouse's ITIN.
You may also elect not to apply for an ITIN and instead print the return with the errors and then write in "NRA" in the space for the social security number.
Once you make the election to treat a nonresident alien as a resident for tax purposes, this election stays in effect until it is suspended or revoked. Also, it is a once in a lifetime election. Once revoked, the nonresident alien spouse cannot elect to be treated as a resident in the future, even if married to someone else. Learn more about this by clicking on this link IRS information for nonresident alien spouses.
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