My wife and I were married last year and I understand that I have the option of filing jointly for 2007 by obtaining an ITIN for her by submitting a W-7 form along with our tax forms.

I'm living in China with her and if we do elect to file jointly, then I wont be able to exclude my foreign income using form 2555 (if we elect to file jointly, then all of our world income is considered US income).

So, I see that we have two choices:

1) Married filing jointly, but without the Foreign earned income deduction.

2) Married filing separately, but this time I can qualify for the foreign earned income deduction.

My question is that if we do married filing separately, do I even need to go through the process of getting her an ITIN and even filing a tax return for her?

Thanks,
JP

If you do decide to file separately, you do not need an ITIN. You must put down that you are married, and put in her name where it is specified. Where there is a space for her SSN, write "NRA" for "Non-Resident Alien."

Or so the tax guys at the IRS office in London told me!

That's right. It's what I've done for 2007 and 2006 returns. Married - filing separately with NRA or 000-00-000 in the SSN spot for my husband.

Why would not be able to claim the Form 2555 foreign income exclusion if you file a joint return? Why would your foreign income be considered US income?
Just curious as I have been filing jointly with my Non US citizen wife (who has a ITIN) for 8 years now, claiming the full foreign income exclusion each year.
TH

I was wondering that too. I elected to file separately because I didn't want to jump through hoops to get my husband an ITIN.

No. You file the 1040 with the ITIN application on top and mail the 1040 &ITIN application to an address provided on the ITIN instructions. They will process the ITIN number and the 1040.

I have just recently encountered this difficulty myself and have been advised that even though my husband and I live in Australia, not the US, and he is not a citizen, nor has he ever lived or worked in the US, in order for my taxes to be filed correctly, he must be issued an ITIN, the W-7 form must be attached to my submitted 1040s along with the required verification of his identity. In our case, that meant paying $110 to a solicitor here in Australia for a notarized copy of his passport and another $60 to the Department of Foreign Affairs to certify the solicitor's notarization! I've spoken to both an international CPA and the IRS help line and they have both confirmed this is the legal way to file in this situation- even though I have am filing Married filing Separately. Very frustrating, but just my experience on the matter!

She doesn't need to file her tax return because she is not a US resident.
What my husband does every year is check married filing separately and mail the form 1040 along with 2555. That's it.

I can't speak to your filing question, but I did want to give you one piece of advice for you to keep in mind as you prepare your paperwork for your wife's visa interview (I saw you've filed for CR-1, I'm assuming you're doing this via DCF). If you do claim the foreign income exclusion, keep in mind that whatever income you exclude for tax purposes will not be taken into account by the Consulate as valid income to support your wife. That means you should definitely start to look for a joint sponsor, because even if your W2s show sufficient income over the poverty line for you to be approved as her sponsor, they look at the bottom line, AFTER all exclusions, to determine your net income. I learned this the hard way in the Ciudad Juarez, Mexico Consulate where my husband had his interview in July. They told me my income wasn't sufficient and even though I had all the necessary forms to prove what I had earned, they wouldn't take into account the foreign earned income. So, we had to rush at the last minute to try to find a joint sponsor. Just a tip, hope it helps you avoid the last minute stress we had to go through!

I am in China, and filed jointly for years 2006 and 2007 (forms 1040 and 2555). It was reviewed, both by my father and IRS, and my wife was given a temporary tax ID number.