How do I report my nonresident spouse's income on a MFJ tax return?

[ClueLessOnTaxes]

Hello,

I'm a US citizen filing a Married Filing Jointly (MFJ) tax return with my nonresident spouse. I understand that I need to submit by mail a statement electing to treat her as a US resident for tax purposes and the W7 form to obtain an ITIN. But prior to submitting, the MFJ tax return requires reporting my spouses worldwide income. Where/how will I report my spouse's income on our joint tax return? She does not have an ITIN, and her employer is not a US employer so they will not provide a W2.

Thank you for your time.

[pk]

@ClueLessOnTaxes , 

Generally your understanding on how to include your NRA spouse  is correct.

1. Is your Tax Home US or abroad ( and if so which country )?

2. Is your spouse a citizen of that country ?

3. If  your spouse is employed , is it a private entity in that country   ( trying to determine if the spousal income can  come under  FEI Exclusion ).

Please answer my questions and I will circle back and discuss your case.

[ClueLessOnTaxes]

@pk, Thank you for reply. The answers to your questions are below:
1) My tax home would be the US.

2) My spouse is the citizen of her country. Not a citizen of the US.

3) My spouse works for a public entity.

I hope the information helps. Please let me know if you need additional information.

[SusanY1]

Since you are preparing to file your return along with your ITIN application (Form W-7), you will enter the name and date of birth of your spouse into TurboTax, and ignore the errors about the missing SSN/ITIN.  You will also check the box in the My Info section indicating that she is a nonresident alien.  

Her wages from her work will be entered under Less Common Income, "other wages".  

If she paid foreign income taxes on that income, you can enter that information in the foreign tax credit section of the program.  There, you will need to tell the program the same income amount as entered previously.  This is just for the purpose of properly allocating the credit and won't "double-count" the income or report it anywhere else on the return.  If her work is completed outside of the US and she has lived abroad during that time, you may also be able to choose to exclude that income rather than take a foreign tax credit.  
 

If your spouse has other worldwide income such as interest, dividends, or capital gains enter this in the same section in TurboTax as you would if it were US-sourced income, even though you don't have those corresponding forms.  

[pk]

@ClueLessOnTaxes , thank you for  answers.

I still need her citizenship country AND whether she present in the US or still in her home country.

Absent any treaty restrictions:

(a)  you prepare the return as usual  --> status  MFJ.  use a dummy SSN/ITIN for her ( just to satisfy TurboTax ).

(b) if you are using windows product, then under personal income and expenses tab,  choose  " I will choose what I work on ".  Then from the drop downlist ,choose and enter your W-2 income per usual. 

(c)  Thereafter, from the in comes list choose  " Foreign Earned Income and Exclusion". Answer all questions -- this is where you entering you spouse's income, details etc.  Along the way Turbo will ask for  details of her Foreign Tax Home,  when she started her foreign Tax home etc.  What it trying to do  is qualify her  for Physical Presence Test ( 330 Days  present in a foreign country over a 12 month continuous test period.  In her case  you can choose 01/01/2024 till 12/31/2024.  This will result in her foreign income ( up to the allowed  amount for 2024 ) being exclude from US taxes.  Note that this will push your tax bracket up ( based on your income plus her world income ) but will allow you to use MFJ standard  deduction.

(d) thereafter you follow  the path that you have described above --  "replace dummy SSN/ITIN  with  N  R  A ;  attach  W-7 and the documents ( copies  will do if certified  by  a local agent or the US consulate )  ;  attach latter by both you and her  requesting that  she would like to be treated as a Resident for the whole calendar year.

Have I answered your query ?

[ClueLessOnTaxes]

@pkYes, this is great! Thank you for your time and I really appreciate the time, attention, and level of detail!

[ClueLessOnTaxes]

@SusanY1Thank you! I really appreciate the information and support!