Taxes filed jointly or single for non resident spouse

[CuriousQQ]

I’m currently on H1B, filling my taxes as a single. This December, I’d be married. My wife lives and works in India with income( around25K USD)in India paying taxes in India. Would I be filling the tax returns for next year as married filling jointly or do I have to file as married filing separately?

Reason I ask because of the standard deduction difference between the 2 statues. Appreciate your response in advance. Thanks!

[DoninGA]

If you are a US citizen or US resident and your spouse does not have a Social Security number or an ITIN and you are not applying for an ITIN with the tax return then you can only file your tax return as Married Filing Separately.  Where asked to enter the spouse's Social Security number enter 999-88-9999.  You can only print and mail your tax return, it cannot be e-filed.  When you print the tax return erase the Social Security number for your spouse and manually enter NRA for non-resident alien.

See this TurboTax support FAQ for the procedure to print and mail a tax return using the online editions - https://ttlc.intuit.com/questions/1944348-how-do-i-print-and-mail-my-return-in-turbotax-online

If you decide to file your tax return as Married Filing Jointly you must apply for an ITIN with the tax return and you would need to be providing a statement with your tax return that you want your Nonresident Alien Spouse Treated as a Resident.  See IRS Publication 54 Tax Guide for U.S. Citizens and Resident Aliens Abroad page 7 - https://www.irs.gov/pub/irs-pdf/p54.pdf

Go to this IRS website for ITIN information - https://www.irs.gov/individuals/international-taxpayers/general-itin-information

[CuriousQQ]

Thanks. If I decide to file jointly, would the tax treaty apply for my wife’s income? Technically none of her income should be taxed since she already once else we would be taxed twice. Any advice would be helpful.

[DoninGA]

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@CuriousQQ wrote:

Thanks. If I decide to file jointly, would the tax treaty apply for my wife’s income? Technically none of her income should be taxed since she already once else we would be taxed twice. Any advice would be helpful.

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If she is treated as US resident for tax purposes by filing Married Filing Jointly she is required to report her income on a a US tax return.  However, she can include with the return a Form 2555 which has an exclusion of up to $112,000 of foreign earned income on the US return.

@pk 

[pk]

@ curiuosQQ, agreeing with @DoninGA'a response 1. yes , you can file jointly (MFJ) with your spouse and thereby get the benefit of larger standard deduction and/or other benefits / credits provided-- (a) you yourself are a US person ( citizen / Green Card / Resident for tax purposes ); (b) you are married before end of 12/31/2022; (c) you together request her to be treated as a resident for tax purposes for the wholeyear; (d) if she does not have an ITIN, then apply for retroactive issuance of ITIN by submitting application ( form W-7 and all the documentation required ). 2. Note this implies that her whole year world earnings are then subject for US taxes . 3. Because she is a resident of foreign country ( India ? ( where she has been earning, you can indeed classify her income as foreign earned income and therefore be eligible for foreign earned income exclusion ( form 2555). For this ( please read the instructions of the form 2555 ) , she (A) must have a foreign tax home ; (B) must meet the physical Presence test ( 330 days present in foreign country / countries in a test period of continuous 12 months ( must include at least part of the tax year under consideration -- for your purposes suggest using 01/01/2022 through 12/31/2022 ); (C) must be a US person ( citizen/GreenCard / Resident for tax purposes. Code sections that cover these positions are 26CFR 1. 6013-4, 6013-5 6013-6; 26 US Code 6013 and 26 US Code 911. You will also find these refd in instructions for form 2555 Coming to your next point about asserting treaty benefits ----- generally as a tax resident of US, you mostly cannot assert treaty benefits -- there are exceptions for students, researchers etc. where specifically called out and the persons are considered temporarily present in the USA for specific purposes or specific period. What US-India tax treaty benefits are you planning to raise ? Hope this answers your query . Is there more I can do for you ? Namaste ji pk

[CuriousQQ]

Thanks, much. Really appreciate it.