Resident or non Resident Alien, Married filing seperate or jointly.

My wife is Canadian, I am a US Citizen, we were married in Aug of 20012.
She entered the Us on a K1 Visa in August 2012 and lived with me through the end of the year 2012.
She had no US income in 2012.
She received her green card in January of 2013.
Her Canadian income for 2012 was under $14000.
My US income was $48000 for 2012.
If we file Married filing jointly, Does she have to disclose her Canadian income for previous years? 
Does that change if we file seperately? 
Does she have to file at all if she does not meet the substantial residency requirements for 2010 through 2012?
How should we file? What are our options? Thank You.
  • Any thoughts on the Resident Alien's Obligation to file a Canadian Tax return? My understanding is that they are considered a non resident in Canada and as such not required to file even their Canadian income but not sure about this.
  • @Thadp: that would be an issue with Canadian taxes, not US taxes.
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Technically she is a non-resident alien for 2012.

 

Generally, a non-resident alien  (NRA) cannot file a joint return. That would mean that if you are married to an NRA, you would need to file as married filing separately or HoH if you have a qualifying child and meet the HoH requirements.

 

Filing married filing separately requires providing the SSN/ITIN for your spouse. However, NRAs often do not have an ITIN/SSN. You can file without it and write “NRA” in the field for the ITIN/SSN if the NRA spouse is not required to file a return and does not have an SSN/ITIN. Note however, that you wont be able to e-file doing this.

 

If the NRA spouse has no US source income, the other spouse can also take an exemption for the NRA spouse on a married filing separately return. In order to do this, the NRA spouse needs to apply for an ITIN if they don’t have an SSN/ITIN.

 

Another option is to file married filing jointly. Since an NRA can not do that, both spouses need to sign a statement that they both choose to treat the NRA spouse as a resident alien for the entire year. This allows them to file jointly. The choice is valid for any following year unless suspended or revoked.

 

Treating he NRA spouse as resident alien means that they are required to report worldwide income. If they have foreign earned income, they might be able to use the foreign earned income exclusion on form 2555(if the meet either the bona fide residency or physical presence test) and/or use the foreign paid tax credit on form 1116.

Filing jointly will also require the NRA spouse treated as resident alien for tax purposes to have an SSN or ITIN.

 

For more info read here:

Publication 519:

http://www.irs.gov/uac/Publication-519,-U.S.-Tax-Guide-for-Aliens-1

 

http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad---Nonresident-Alien-Spouse

 

 

 

  • As far as Mfs  return. You say NRA spouse needs to apply for a itin.Do you mean needs only to apply? Or do I have to wait for the whole application process and NRA wife to receive a response and/or number before I can submit our form?
  • re: time to get the itin...
    no, the process can take months. u simply need to send the application form along with the filing papers. It says on one of the publications, I think 549Pub54_(2012)_TaxGuide_forU.S.Citizens_Abroad).
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It seems that (and as per Bine22's posting) the spouse does not need to apply, if he/she had no US income.. 'not required to file..' only if you want to claim an exemption (which may or not be worth to get depending on you deductions if u itemize).  The pubs only explain how to treat an NRA as a resident, not much explanation if you choose not to do so.  


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