How to tackle tax filing for 2021 w. NRA spouse?

[Anonymous]

Hi there,

I'm looking to get some guidance on the best course of action for tax filing for 2021. 

My spouse is on a H4 visa and joined me in the US on 8/28/2021  (i.e 177 days in the US).  She does not have a SSN or ITIN.  We did apply for her H4 EAD (work permit),  which is likely to come thro by Sep or Oct'22, thereby giving her a SSN automatically.

I was thinking about jointly filing for 2021 and claiming her as my dependent.  I understand I would need to apply for an ITIN now to do so, and submit my completed return along with it.  She might have some foreign income (<$1K) through a joint account with her mom back home. 

So wondering if it makes sense for me file as an Individual for 2021 or actually pursue the joint filing if she's eligible (i.e resident for tax purposes)?   

For tax year 2022, she might likely start working, and we can then do the joint-filing no problem. 

Thanks in advance for any inputs or insights. 

~N

[Vanessa A]

It depends, generally couples are better off filing a joint return.  There are some tax credits that you may not be eligible for if you file separately and your standard deduction is $25,550 when filing joint instead of $12,550 when filing separate. If you do not have itemized expenses greater than $25,550, then filing jointly will lower your taxable income which will lower your tax liability since her income is only $1,000. So, you may be better off tax wise to file jointly this year. 

If you choose to file separately, you will still need to print and mail your return as a separate return still requires you to enter your spouses Name and TIN.  Since she does not have one, you would need to include her name along with a brief explanation of why you do not have a TIN for her. 

Note, filing a joint return is different than claiming someone as a dependent. Spouses cannot be claimed as dependents.  They are "Co-owners" of the tax return.

If you are filing jointly, you will need to print and mail your return along with the W-7 and any other required documents to

IRS

ITIN Operation

P.O. Box 149342

Austin, TX 78714-9342

Whether you file jointly or separately, you will need to print and mail for this year.  

[Anonymous]

Vanessa, thank you for your prompt response!  

Do you know if there's a clear requirement of how long my spouse (non resident) needs to be in the US, before I can apply for an ITIN and claim her on my tax filing? 

They mention the substantial presence test here https://www.irs.gov/instructions/iw7 but not sure if it applies for spouse of resident alien.   

I'm okay to file jointly and apply for her ITIN.  Just that I'm not sure if I'm allowed to,  and because it will be a one time thing  (since she will have her SSN by the end of the year). 

Thanks

[Anonymous]

Also, it would be great if you could clarify,  if it is possible to e-file without a dependent for now, and then file an amended tax return later  considering my circumstances? 

Thank you again. 

[Vanessa A · Accepted solution]

You can apply for an ITIN now for her.  Non Resident Aliens can apply for an ITIN, so there is no requirement that one be in the US for any length of time to apply using the W7. The ITIN you receive is not the same as a Social Security Number.  

No, whether or not you include your spouse on your return, since she does not currently have a Taxpayer Identification Number, you cannot e-file your return.  It will have to be printed and mailed.  Either with the W7 application or with a statement that your wife is a Nor-Resident Alien or that she is here on a visa and you have applied for a SSN. 

If you are talking about an actual dependent and not your spouse, yes, you can file without them now and then amend your return later to claim them as a dependent.  Any dependents you claim will need either a social security number or ITIN.  You can also later Amend Your Return  to change your filing status.

You do also have the option of filing an extension since she will be receiving a SSN.  If she gets her SSN before the extension deadline you can then e-file.  However, many things with the government are backed up, so if you try this route, be sure that you do not miss the extension filing deadline if her SSN does not come on time. 

[Anonymous]

Thank you, Vanessa!

I have more clarity on the next steps now.