What if my wife lives in a different country?

[superduper]

I am planning to file married filing jointly. We married last year in Oct 2021, and my wife is a resident of Canada. She does not work in the USA nor has ever been to the USA. It's recommended we file married filing jointly for the USA Tax return, due to immigration reasons. I make about $150,000 a year, she makes about $48,000 USD equivalent. Is her income excludable per the IRS tax treaty? She is a Canadian PR and an Indian Citizen.

She has never been in the USA, her tax home is Canada, so per Form 2555 she should meet the requirement to be able to exclude her income? I am saying it will be added, but will also be excluded, so the net effect on our tax return would be 0. She does of course pay Canadian Income tax. Seems two options, to exclude her income using Form 2555 or to take foreign tax credit using form 1116. Anyone have expertise? 

It does state on, https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse

"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. However, the exception to the saving clause of a tax treaty might allow a tax treaty benefit on certain specified income."

[kdpukp]

Let me clarify

My wife is resident having ITIN. She has no income, She does not reside in the USA. Can I file joint return eventhough I do not support her anymore. I am not qualified to file as Head of Household

[xmasbaby0]

@kdpukp   @DawnC  

I happened to notice that you have asked two related questions in different threads, which makes it confusing and difficult for the folks trying to help you.  Please keep your related questions in one thread.  I also noticed you asked about filing a joint return---and your spouse is out of the country.   If you do that, and receive a refund--the refund will have both of your names on it.

https://ttlc.intuit.com/community/taxes/discussion/i-am-married-my-wife-has-left-and-resides-out-of-...

[fe7565]

Advisable sequence to file?    I need to amend 2021 tax return from "married /separate"  to "married - joint"... and then file 2022 tax return as "married - joint".   Should I file both the amended 2021 return and the new 2022 return at the same time?  

Concerns: if I amend my 2021 tax return now in Apr 2023, it may take 20 weeks or more to process at the IRS.  Which is OK, but if the IRS has issues with the 2021 calculations, etc that can change the totals and then the 2022 calculations/numbers may be off as as well.  So then my 2022 tax return would need to be amended too.    

Background:  married in Nov 2020, wife lives overseas still, has no ITIN, SSN, no US presence, no US income.  She does work for the US Department of State in the US Embassy as a foreigner in her country, but she gets paid as a local citizen and only local foreign country tax rules apply to her.   

Last year we did not have all her 2021 salary paperwork available by the Apr 2022 tax deadline so filed married/separately and took a $2000 hit on  the fed taxes and $1000 on the state.  This time we think we have what we need to amend 2021 from separate to joint and file a correct joint 2022.  (I know that this is an irrevocable decision to file jointly, but she makes much less then I do and separate vs joint is a huge difference)

She does not have a so called W-2 like we do.  Her foreign country social security payments etc are collected from her paycheck(s), but she does not have a de facto tax return form, so we hope the IRS will still accept her annual pay breakdown and deductions form.  But that is a separate question....

[Critter-3]

Since she currently  has no SS# or ITIN  I would :

File the joint 2022 return with the W-7 application for the ITIN now  and  amend the 2021 return once the ITIN has been issued since you cannot amend the 2021 return without it. 

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

[fe7565]

Thank you very much @Critter-3  Couple of questions... 

Looks like I should have filed a W-7 along with amending my 2021 return sufficiently before this 2022 tax return filing deadline so it would have been processed. Which would have established an ITIN for the 2022 return and also would have given solid 2021 carryover numbers for the 2022 return as a base.  I think my 2021 capital loss carryovers and itemized deductions (amongst others) were halved in 2021 by filing married-separately. 

EDIT:   My fault...   I just read the Form  W-7 instructions in more detail and because my wife is overseas.   I do not see how we can meet the "supporting documentation" requirements before 18 Apr 2023.  They require original documents or certified  copies by original issuing agency.  She can't accomplish and send any of those to me by the tax deadline.  Obviously she needs her passport and driver licence, etc  there with her, and getting certified copies done also takes time.

====================================================================

Remaining questions about future filing...

Question 1: So there is a possibility that if I use my originally-filed 2021 married-separate return carryover numbers in my 2022 (married-jointly) return AND submit an amendment to my 2021 return later (as married-jointly) that my 2022 return will have to be amended later on as well (because the carryovers from 2021 are different)?  If that’s the case, should I base my current 2022 return on 2021 carryover numbers “as if” I filed my 2021 married-jointly (hoping that the 2021 amended return will be accepted as I calculated)?  Or just file as you outlined in your answer, which may requiring the 2022 return to be amended later as well due to the 2021 carryovers used having changed?

Question 2:  if filed as married-jointly she will be treated as a US resident.  For this reasons....does she need to submit her foreign banking/financial records, foreign housing related expenses, etc even if none are associated with any US entities?  What about her special situation by working for the US Government as a foreign citizen employee (US Embassy) in her native foreign country? 

Question 3:  What about the 2022 state filing (Virginia) without the ITIN? Attach the submitted W-7 copy to the state filing?

Thank you again! 

[kdpukp]

I can file married joint (spouse has left and resides in foreign country with no income) as one option. However I do not have any communication with her and since joint return requirs her signature or in Turbotax I can creat a pin number for her and file. Since she does know I am filiing joint will not that be illegal?

[HopeS]

Yes, filing jointly without your wife's knowledge would be unacceptable.  You should not file the return unless she is available to review and sign it as well.

You may want to file an Extension until you are able to contact your wife.

See the steps below for filing an Extension:

TurboTax Online

1. Sign in to TurboTax
2. Select File an extension in the left menu
   • If you don't see File an extension, open a section of your return, search for extend and select Jump to extend 
3. Follow the instructions to e-file your extension

See the link below for more information:

Filing Extension

@kdpukp