This is a complicated situation, and you may want professional assistance this year. I will try to explain your options.
Although your wife has a visa, she will not be a US resident for income tax purposes until she steps foot on US soil. If that does not happen before December 31, 2020, then she is a non-resident alien for 2020. With your spouse as a non-resident alien, you have two tax options.
1. You file as “married filing separately.“ List only your own income, deductions, and credits. You will need to give the name of your spouse. Leave the spouse’s SSN blank, print your return, and write “NRA“ in the space for her SSN, then sign and mail your return to the IRS.
If your spouse has US-sourced income while she is a non-resident alien, she must file her own separate tax return form 1040-NR, which is not supported by TurboTax,and which only includes her US-sourced income. If she is a non-resident alien and does not have US-sourced income, she files no US tax return.
2. You can file as “married filing jointly“ if you make an election to treat your wife as a US resident for tax purposes. This means that you must include all her worldwide income and pay US tax on it. You will get a deduction or tax credit if she also pays foreign income tax on the same income, and this may offset the effect of US taxation. Married filing jointly has lower income tax rates and better deductions then separate filing. However, whether it is better for you to file jointly and make the election to treat your spouse as a resident, or to file separately, is something that only you can tell by doing test returns both ways.
If you make the election to file jointly, then you will print your return and file by mail. You will also print a form W-7 application for an ITIN, international tax ID number. Mail the W-7, any documents or proof that is required for the W-7 and your tax return, all to the address where the IRS processes W-7 applications. After the IRS issues the ITIN, they will forward the tax return for processing. You can’t apply for the ITIN separately or before you file your joint tax return.
If your spouse arrives on US soil before December 31, 2020, then she is a US resident beginning on that date, and she is a dual status alien for the year. If she has no US income, or her only US income is paid after she arrives on US soil and becomes a resident, then you can file a return as married filing jointly and report her US income along with your income. You would file and apply for the ITIN in the same way as before.
If your wife has foreign income while she is not a US resident, and you do not make the election to treat her as a US resident for the whole year, but she then becomes a US resident before December 31, 2020, then you will need to see a professional this year. This situation is not covered in TurboTax.
The situation with your child is much simpler.
If your child does not become a US resident before December 31, 2020, then you cannot claim your child as a dependent on your tax return, regardless of whether you filed separately or jointly with your spouse. All dependents must be US residents or US citizens.
If your child becomes a US resident before December 31, and you file separately from your spouse, then you cannot claim your child as a dependent because the child did not live with you more than half the year.
If your child becomes a US resident before December 31, and you file a joint return with your spouse, then you can list your child as a dependent. Your child needs to apply for an ITIN the same as your spouse. Follow the same procedure described above, except that you will include 2 W-7 applications, one for your wife and one for your child.
