What if my wife lives in a different country?

[Mata13100]

Thank you DaveF1006

[GWH7817]

When creating the statement to the IRS that a married couple will file jointly, with the non-resident considered resident for tax purposes, should the non-resident spouse list their foreign home address?

[Vanessa A]

Yes, you should list the non residents address as well as the residents address.  

[fe7565]

Can I amend a 2021 "Married-Separate" tax return later at next filing year into a 2021 "Married-Joint" filing status and still get back the refund as if I filed it in 2021 as Joint?   There is just not enough time to get my spouse's papers together before the 2021 deadline in order to file Jointly.  So I will need to file Married-Separate but will take a $2255 hit vs  if filed Jointly.   I am a US citizen (no dependents) married in 2021 to a non-resident alien spouse who has no SSN or ITIN and who remains overseas for the foreseeable future. 

[DaveF1006]

Yes, you may amend your 2021 tax return to Married Filing Jointly once your documentation is in order. Make sure when you when you do, follow the steps below regarding the documentation.

1. Attach a statement to your tax return, signed by both spouses, that states that one spouse is a nonresident alien and the other is a U.S. citizen or resident alien, and you are choosing to both be treated as US residents for the tax year. 
2. List the name, address and Social Security number (or Individual Taxpayer Identification number) of each spouse.  You will need to complete a Form W-7, Application for IRS Individual Taxpayer Identification Number (ITIN) (http://www.irs.gov/pub/irs-pdf/fw7.pdf).  This form will be attached to your tax return.  Turbo Tax does not support the Form W-7.  You can complete it outside of Turbo Tax.  You will have to print, sign and mail your return in if you are using Form W-7.
3. For the first year you make the choice, you have to file a joint return. In later years you can file joint or separate returns. Married Filing Jointly will give you a higher standard deduction and has other benefits that are not available using a married filing separately status, but you do have to include your spouse’s worldwide income in joint income.

@fe7565

[fe7565]

Thank you @DaveF1006  for the very detailed reply.  Question in regards to my spouse's foreign income if jointly filing:  file her worldwide income by filling out a W-2 form? (they may have a different form and blocks on the form)   Where in the tax forms do I add the taxes she already paid in her country on her income? And where do I add in the tax forms her foreign savings/investments and gains/losses?   (She has zero US income+banking,+investment,+property, etc. )            Thank you!

[Critter-3]

You also could file an extension instead of filing and amending later especially if you will owe less or get a refund when filing jointly.  

[sriva119]

Hey Dave,

Thanks to Turbotax and this thread's help, I filed married filing jointly last year (2020 tax year), treating my nonresident wife as resident. I was hoping if you could help me with our current situation - 

This year, my wife has become a resident alien as she has been in the US for the entire year on the H-4 spouse visa. But next year, she will again become a nonresident as she will transition to F-1 student visa. I will continue to remain a US resident alien for tax purposes though. So once again, we are looking to avail the choice of treating my nonresident spouse as resident, starting next year.

So there are three questions in all -
1.  Does one have to send a letter to IRS every year, clarifying that they are making this resident treatment choice, or is it needed just for the first year?
2. Specifically in my case, will our choice of treating nonresident spouse as resident be automatically suspended (or even ended?) for 2021 tax year, if I simply file my taxes online through Turbotax (MFJ) without writing any letter to IRS?
3. Will we have to again write a letter to IRS next year, explaining the situation? If yes, will we have to ask them to resume the choice (if it is suspended) or just mention that we are availing this choice (like we wrote to IRS last year)?

Thank you very much for all your support.

[DaveF1006]

Yes, let me answer these questions individually. 

1. According to IRS.gov, you will attach the statement and make the choice in the first year. Once made, the choice to be treated as a U.S. resident for federal income tax and withholding purposes applies to all later years unless suspended (as explained above) or ended in one of the ways shown below. You must file a joint income tax return for the year you make the choice (but you and your spouse can file joint or separate returns in later years).
2. Once the election is made in the first year, you can choose to file jointly or separately in subsequent years.
3.  There is a caution that is listed in the document that states if the choice is ended neither spouse can make this choice in any later tax year, even if married to a different individual – it is a once-in-a-lifetime choice.

@sriva119

[DaveF1006]

According to IRS.gov, Generally, neither you nor your spouse can claim tax treaty benefits as a resident of a foreign country for a tax year for which the choice is in effect. This means that your wife will not be able to receive a credit for the taxes paid to a foreign country unless there is a savings clause in the tax treaty that provides an exception. 

You do not need a W2 to report her income.  You would report it by going to;

• Go to federal>wages and income
• Less common income>miscellaneous income
• Go to other reportable income
• Enter a description of your foreign income and the amount

It depends on the foreign income investments that need to be reported.

• Go to federal wages and income. From here you can report interest and dividends by going to interest and dividends. Here you can report interest and dividends information.
• For stocks and bonds or other investments you will enter these in a section entitled Investment Income.

@fe7565

[sriva119]

Hi @DaveF1006 ,

Thanks for your response. Just to clarify - 

This will be my wife's residency status for tax purposes (NR - Non Resident, R - Resident) - 
Tax year 2020 - NR (opted to treat NR as R)
Tax year 2021 - R
Tax year 2022 - NR (want to opt for treating NR as R)

I was a R in 2020 and will remain so for all future tax years.

In 2020, we opted for the choice (treat NR spouse as R). In 2022, we hope to opt for this choice again. 2021 is the spot of confusion for me.

1. Do I need to do anything in 2021 so that I can opt for this choice again in 2022?
2. Should I ask the IRS to suspend the choice for 2021 (so that I can resume it again from 2022)? Or is it automatically implied and hence I don't need to do anything?

I am asking these questions just to ensure that we don't mistakenly end the choice in 2021 and are hence unable to opt for it in the future.

Added background - My wife had foreign income only in 2020, which we did report on our tax filing. But she won't have any foreign income for this year and any year in the future. She will go from R to NR from 2022 only because of a change of the visa status. She will still remain full-time in the US though.

Thank you very much.

[DaveF1006]

According to the IRS treatment for a non-resident spouse, you can remain in the first year election unless both of your resident status changes. If that happens, you suspend the choice for the tax year but you may resume it in future tax years. If you plan on remaining in the US though, you will not suspend the choice. 

As far as your wife's vis status change, you may still file MFJ for income tax purposes because this will give you the best tax return outcome.

@sriva 119

[sriva119]

Hi @DaveF1006 ,

Thank you very much. So I will just go ahead and file normally this year. I won't mail IRS to alter any tax election.

Since in both current year and next year only my wife's status changed/will change (2020 NR -> 2021 R -> 2022 NR), so this isn't violated - both of your resident status changes. That means, the first year election of treating NR as R will stay in effect even for 2022.

The only thing I would do differently for the 2022 tax year is that I will mail the tax return to IRS, just like I did for the 2020 tax year, as one cannot e-file with NR spouse.

Do you advise that I send a letter to IRS next year, along with my 2022 return, reminding them of the choice I made in 2020? Just so that all doubts related to 2021 change of status are dispelled. 

Thank you very much for all your prompt and detailed responses.

[DaveF1006]

No this isn't really necessary. However, if you do mail in your return, you may include a statement reminding them the choice you made in 2020 for your own piece of mind.

@sriva119

[sriva119]

Hi @DaveF1006 ,

Thank you once again. You have been a great help!

Best Regards,

Kundan Srivastav