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Can I file my tax as "married filing jointly" where my wife is a resident of a foreign country?

I am a USA Citizen and got married to my wife in 12/2011. She is a resident of a foreign country and she has never been to USA. She is working in a foreign country. Can I still file my tax as "married filing jointly" ? If so, should I report her annual foreign income in my taxes even though she plans to file her tax in her foreign country?

FYI, I also have my parents whom I claim as dependent on my taxes for last few years. Can I still report them on taxes this year if I can file my taxes as "married filing jointly" ?
    You could file jointly, but you need to add a statement that both of you choose to treat your wife as a resident alien.
    In this case you would need to report her worldwide income. She can exclude a certain amount from being taxed using the foreign income exclusion if she passes the tests for this exclusion or use the foreign paid tax credit.

    If you don't want to treat her as a resident alien, you can file married filing separately and take an exemption for your wife if she has no US source income.
    You would need to apply for an ITIN on form W7. In any case you would not be able to e-file your return.
    • Thanks for the prompt response.

      I am not sure if I totally understood your answer, so I will try to be more clear about my present situation and ask questions on your feedback:

      Present Situation:
      1. I am a USA Citizen and claiming my parents as a dependent for last few years.
      2. My wife lives in India and she works there. Her income tax gets deducted from her pay check. She has not filled a tax return over there (she started working from 2010) to claim any refund but she is planning to file this year.
      3. She has never come to USA, so does not have SSN as well. I have filled an immigration petition for her to get her a permanent resident status in USA. This file is in process rightnow.

      Questions from your feedback:
      1.  Under which circumstances I can claim her foreign income as a foreign paid tax credit?
      2. If I file as married filling separately, can I still take an exemption for my wife even though she is not living in USA?
      3. I did not get under which circumstances you are referring to apply for an ITIN on form W7.
      4. How can I add a letter stating that I am considering her as a resident alien even though she is not rightnow?

      FYI, I always file my taxes in paper file, so will not use e-file this year as well for federal and state taxes.
    You don't add her as a dependent. You need to add her as your wife. However, when you choose not to file jointly, the software will ask you a bunch of questions about her (her income, her residency status etc). After you answer all those questions, you will get the personal exemption for her.

    http://www.irs.gov/businesses/small/international/article/0,,id=96729,00.html
    http://www.irs.gov/businesses/small/international/article/0,,id=96734,00.html
      1. If you decide to treat your wife as a resident alien, you are required to report her worldwide income. If she is paying taxes in India, you can report those taxes on your joint return and you would get a credit for those taxes to avoid double taxation.
      2. Filing separately would mean, that you do NOT choose to treat her as a resident alien. So she is a non-resident alien. In that case you can take an exemption for your spouse if she has no US source income.
      3. If you file jointly, you definitely need to apply for an ITIN. If you file separately and take the exemption you might have to apply for one, I'm not 100% sure. But I would recommend to do it anyway to avoid any delays or need for an amendment later.
      4. You would just write a statement on paper including information about you and your spouse (including your SSN, her passport information) and saying that you both choose to treat her as a resident alien. You would both need to sign.
      • Thanks! So if I decide to file as a head of household this year. Are you saying that I may add her as a dependent along with my parents to get tax exemption? In my case, we were engaged in 2/2011 and got married in 12/2011. But she has not lived with me. I am just little worried whether she can be considered as an eligible dependent or not. What's your thought?