Tax filing status after leaving US mid-year (J-1/J-2)

[FCarv]

Hello everyone,

I have been living in US since January 2023 with a J1 visa and I never left the country since then.  This year was my first year as a resident for tax purposes and my wife (J2) and I could file as married filing jointly and use the standard deductions.

However, we are leaving the country by the beginning of June (or end of May). So, I have a question regarding our filing status next year:

- Is it possible for us to choose to be treated as residents for the full year or would our only option be to file as dual-status taxpayers?

I am asking because, with dual-status filing, we would have to file as married filing separately and would not be eligible for the standard deduction. I also understand that if we choose to be treated as full-year residents, any income earned in our home country would be subject to US taxation. However, considering the standard deduction and exchange rates, this option might still be more beneficial than filing as dual-status.

Thank you in advance!

[pk]

@FCarv , if you entered the country in Jan 2023 with J-1, then 2025 would be your first year of Resident for Tax purposes ( counting days and meet SPT).  Thus for 2026, if you leave the country by end of May, you may  still be  Resident  for tax purposes.   So yes , absent you coming back  during the  year 2026, you are dual status ---- resident  till exit date and NRA thereafter.  Your are taxed by the USA on world income till exit date   ( form 1040 )   and thereafter on US sourced /connected income ONLY and on form 1040-NR.

But yes, this does mean itemized deduction.

You generally cannot be a resident for tax purposes once your  "legal stay" expires ( end of visa ).

What are you trying to achieve ?   Use standard deduction in exchange for  US tax on foreign earnings and claim FTC ?

[FCarv]

Hello @pk,

Thank you for your clarifications! Yes, my idea was to be able to use standard deduction in exchange for US tax on foreign earnings and claim FTC. But it seems it would not be possible. Right?

So, filing as dual-status: since I will not have any US sourced income after I leave, it is just enter $0 for the gross income on my 1040NR. Correct? As for my wife (J2), since she is not working here in the US: she would file forms 1040 and 1040NR with $0 for her gross income in both. Or in her case, she would not need to file? I recall seeing that people with $0 income does not need to file.

Best regards!

[pk]

@FCarv , yes your understanding is correct.

(a) you file 1040 for the period that you are resident ( your spouse having a dependent visa also is a resident for that period) --- thus you could file  1040 as MFJ.  

(b) for the 1040-NR, it allows only single/married --- so only you need to file.  Since  your wife (J-2) will not have any US  sourced/connected income , it would not be essential for her to file a 1040-NR.  However, for completeness, and because you have to file by mail anyways, you can always add a second  1040-NR in her name/SSN/ITIN.

That should be it.

Good Luck back home

pk

[AmeliesUncle]

It is my understanding that if you don't submit a statement to tell the IRS your Residency Termination Date, you are a full-year Resident (the Residency terminates on December 31st, unless you file the statement to indicates it ends before then).

https://www.irs.gov/publications/p519#en_US_2025_publink1000222182

[pk]

@FCarv , generally agreeing with the observation of my colleague @AmeliesUncle  that you are mostly required to declare to the IRS that you are no-longer a Resident for Tax purposes by submitting a 1040-c -- >  Form 1040-C (Rev. January 2024) as and when you leave the US.  You should do that within about two weeks prior to leaving the US.   Cancellation of your J-visa and employment/research does not automatically get to the IRS in time.  

My error -- I should have mentioned that.

Also note that if you expect any refunds ( from the Fed and/or the State), you should leave your US bank account operational till the tax affairs are settled.   You also should have a US forwarding address valid  because IRS will generally prefer an US address for communication.