Hello. I'm going to relocate to the US with my wife soon by L1B(wife has L-2) visa, and I have a question about the W-4 form.
I need to complete it by the first working day in the US.
There is a section in the W-4 form where I need to mention my status (single, married, head of household).
Can I choose the "Married filing jointly or Qualifying widow(er)" option in my case?
If not, what should I choose?
I read a lot of resources/forums, and there are a lot of opinions about that.
Could you please help me with that?
I really appreciate any help you can provide.
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@real4uk , sorry for the confusion :
(a) your filling out of the form W-4 is only good for your employer to withhold taxes on behalf of the Federal and the State. They do this by computing taxes due on the income earned till date at that employer and is based on "estimated deductions" that you probably will claim. Many people fill out W-4 as single ( when they actually married )-- this way more of their earnings are held back as "prepaid" or PAYE taxes. The advanatge of this is that when they finally file their returns they get a larger amount back -- it is their money that was loaned to the govt. at zero interest. Some use this as a forced savings or other reasons.
(b) when you file your return , it is the real taxes computed, adjusted against the withholding and excess returned to the taxpayer. It is not a PAYE system in that respect and unlike the UK , you have to file each year unless your income is below the filing requirement ( in the region of 10-12 K or thereabouts, depending on your filing status and number of dependents etc. )
(c) if you enter the USA on December 25th, you may not have any earnings in the USA for the tax year 2021 and thus you will not need to file a return on or before April 2022. In such a case you may be better served by staying out of the USA till the 1st. Jan2022 -- taxes would be simpler ( in the USA ). UK also may not tax the first quarter of 2022 ( have to look up the USA-UK tax treaty to be sure -- some countries do claim this period though ).
Hope this clarifies the situation ( difference between the UK and the US system ).
@real4uk , welcome to the USA and hoping this will be a great foreign assignment for you ( as mine was assigned to UK 35 years ago ).
For your W-4 , your filing status is Married Filing Joint ( MFJ ) -- this gives you the best tax outcome , generally. My assumptions here are : (a) you and your wife agree to file together and therefore are subject to your world income ( including her world income ) once you become Resident for Tax purposes --- pass the Substantial Presence Test ; (b) you are both citizen of another country ( UK ?); (c) You have US employment and your wife does not/will not have US income ( because she has a dependent visa not good for employment in the USA); (d) you both have a tax id valid in the USA ( you with SSN and she with SSN or ITIN )
Is there more I can do for you ?
@pk , Thank you for the answer.
We are relocating to the US next week.
We are both citizens from another country.
As far as I know, to become a US resident, we have to live at least 183 days in the US.
However, until we are not residents, can I choose MFJ status in W-4 form?
My wife is going to work after she gets EAD.
@real4uk , sorry -- I was not clear --- you can always choose MFJ ( on the W-4 because this affects only the withholding amounts per pay period). When you finally file during 2022 ( tax filing/ paying day is April 15th. ), only then you make a final decision and only for that tax year ( same as calendar year ).
Is there more I can do for you ?
@pk Thank you again!
For example:
1. We arrive in the US
2. I fill out the W-4 form and set status as MFJ.
3. Before 15 April, we become US residents, and it means that I do not need to pay any additional taxes, right ?
But in case if we arrive in the US, for example, 25 December, fill out the W-4 form with status MFJ and not become US citizens before 15 April, it means that I need to pay additional taxes as for a “Single or Married filing separately”. Is it correct ?
@real4uk , sorry for the confusion :
(a) your filling out of the form W-4 is only good for your employer to withhold taxes on behalf of the Federal and the State. They do this by computing taxes due on the income earned till date at that employer and is based on "estimated deductions" that you probably will claim. Many people fill out W-4 as single ( when they actually married )-- this way more of their earnings are held back as "prepaid" or PAYE taxes. The advanatge of this is that when they finally file their returns they get a larger amount back -- it is their money that was loaned to the govt. at zero interest. Some use this as a forced savings or other reasons.
(b) when you file your return , it is the real taxes computed, adjusted against the withholding and excess returned to the taxpayer. It is not a PAYE system in that respect and unlike the UK , you have to file each year unless your income is below the filing requirement ( in the region of 10-12 K or thereabouts, depending on your filing status and number of dependents etc. )
(c) if you enter the USA on December 25th, you may not have any earnings in the USA for the tax year 2021 and thus you will not need to file a return on or before April 2022. In such a case you may be better served by staying out of the USA till the 1st. Jan2022 -- taxes would be simpler ( in the USA ). UK also may not tax the first quarter of 2022 ( have to look up the USA-UK tax treaty to be sure -- some countries do claim this period though ).
Hope this clarifies the situation ( difference between the UK and the US system ).
I would chime in here just a little because your situation is quite similar to what mine was in September last year (I arrived in the US end of September 2021, L1B visa with wife on L2). Wife got her EAD just this past month (July).
In my 2021 tax return, I was a nonresident alien because I did not meet the substantial presence test (which I assume you won't meet either given the time that you're arriving here). Therefore, my return was filed as "married filing separately" because my wife didn't get an SSN issued at that time either (the SSA is ridiculously backlogged and slow because of COVID). Knowing that that was going to be my filing status, that's what I indicated on my W-4 as well. Based on what the tax accountant that I consulted with told me, it didn't matter because a nonresident alien cannot claim deductions, only child tax credits. And so if that's the scenario that you think is going to play out for you as well, I hope knowing this will help.
Given our relatively similar situations, I'm happy to try and help answer any other questions that you might have as well. But yes, W-4 only affects your withholdings, not the actual tax bill which will come later when you file your return.
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