FYI for tax year 2009 relative to non-immigrant spouse

[Mikedmaster 1]

U.S. Citizens and Resident Aliens Abroad - Nonresident Alien Spouse

Election to File Joint Return

If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other is a nonresident alien, you can choose to treat the nonresident as a U.S. resident. This includes situations in which one of you is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other is a nonresident alien at the end of the year.

If you make this choice, the following rules apply:

You and your spouse are treated, for income tax purposes, as residents for all tax years that the choice is in effect

You must file a joint income tax return for the year you make the choice

Each spouse must report his or her entire worldwide income on the joint income tax return

If you make this choice, you and your spouse are treated as residents for your entire tax year for the purpose of your federal individual income tax return, and for the purpose of withholding U.S. federal income tax from your wages. However for the purpose of Chapter 3 withholding you may still be treated as a nonresident alien. Refer to Withholding of Tax on Nonresident Aliens and Foreign Corporations (Chapter 3 of the IRC) in Tax Withholding Types. In addition, you may still be treated as a nonresident alien for the purpose of withholding Social Security and Medicare tax. Refer to Aliens Employed in the U.S. – Social Security Taxes.

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 and you are both taxed on worldwide income. However, the exception to the saving clause of a particular tax treaty might allow a resident alien to claim a tax treaty benefit on certain specified income. 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.

Example:

Pat Smith has been a US citizen for many years. She is married to Norman, a nonresident alien. Pat and Norman make the choice to treat Norman as a resident alien by attaching a statement to their joint return. Pat and Norman must report their worldwide income for the year they make the choice and for all later years unless the choice is ended or suspended. Although Pat and Norman must file a joint return for the year they make the choice, they can file either joint or separate returns for later years.

How To Make The Choice

Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following:

A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year, and that you choose to be treated as US residents for the entire tax year, and

The name, address, and social security number (or individual taxpayer identification number) of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)

You generally make this choice when you file your joint return. However, you can also make the choice by filing a joint amended return on Form 1040X, Amended U.S. Individual Income Tax Return (PDF). If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice.

You generally must file the amended joint return within 3 years from the date you filed your original US income tax return or 2 years from the date you paid your income tax for that year, whichever is later.

I thought others might find this helpful. Happy New Year

Edited December 30, 2009 by Mikedmaster

[payxibka 10,045]

Several taxation threads exist on VJ and is a topic that has been discussed for years....

not a K-1 visa discussion topic... moving thread

[FortLaudy 10]

Thank you, I found this helpful... just a question on the "world wide income"

How is this classified in case of an international student using an investment account for income to pay tuition/living expenses?

Is only the interest earned on the lump sum counted as "income", or the total amounts transferred to the US? Or the total amount that is in the account?

Also:

Is there a tax break/credit/write off for tuition fees paid? or something along those lines ... I'm completely clueless when it comes to paying taxes...

[Mikedmaster 1]

Thank you, I found this helpful... just a question on the "world wide income"

How is this classified in case of an international student using an investment account for income to pay tuition/living expenses?

Is only the interest earned on the lump sum counted as "income", or the total amounts transferred to the US? Or the total amount that is in the account?

Also:

Is there a tax break/credit/write off for tuition fees paid? or something along those lines ... I'm completely clueless when it comes to paying taxes...

I am by no means a tax expert either; but I thought 2009 taxes was a interesting topic for all new petitioners and their spoues!

In general the IRS consider all income from investments or interest from bank deposits as income which has to be claimed in addition to directly earned income.

Furthermore, should you choose to be considered a resident for the tax year 2009 then you should be able to deduct tuitions paid as a student, but this is also dependent on the amount of your AGI-adjusted gross income-for the tax year. I am not sure what the AGI cut off is for tax year 09 with respect to tuition deductions. It is best to consult a qualified tax expert than to risk to IRS coming after you.

I did not claim interests earned from a bank account last year and they did come after me with a vegance. That is why I looked up the rules with respect to non-immigrant spouse. I posted it just in case others were also interested. Best wishes. M

[NigeriaorBust 4,087]

I thought the tuition deduction was one of the ones that died this year

[marie09 5]

Disclaimer - I don't know taht much about taxes - I usually hiore a tax consultant to do them for me!

But last year I was talking to my H&R Block Tax consultant and she asked me if i'd been studying... I told her how I was planning on going to college in 2009 (now 2010) but anyways she told me to keep receipts for everything school related even text books as it was it was all tax deductible. She also told me had I kept receipts etc... my GMAT and study books, prep classes etc... were also tax deductible. I was kindof surprised as I hadn't thought of trying to claim grad school prep as a tax exemption. I'm sure it may or may not be different if you're married and your spouse makes a lot though. But if you're a student it might be worth asking a tax consultant about student deductions...

[Mikedmaster 1]

I thought the tuition deduction was one of the ones that died this year

Topic 457 - Tuition And Fees Deduction

You may be able to deduct qualified tuition and related expenses that you pay for yourself, your spouse, or a dependent, as a tuition and fees deduction. To determine whether your expenses are qualified, refer to Publication 970, Tax Benefits for Education. You do not have to itemize to take this deduction. You can claim qualified tuition and fees as either: (1) an adjustment to income, as directed above; or (2) a Hope or Lifetime Learning credit, or (3) if applicable, as business expenses.

You cannot take the tuition and fees deduction on your income tax return if your filing status is married filing separately, or if you are claimed as a dependent on someone else's return. The deduction is reduced or eliminated if your modified adjusted gross income exceeds certain limits, based on your filing status. You cannot claim the tuition and fees deduction and a Hope or Lifetime Learning credit for the same student. If the educational expenses are also allowable as a business expense, the tuition and fees deduction may be claimed in conjunction with a business expense deduction, but the same expenses cannot be deducted twice.

You cannot claim a deduction or credit based on expenses paid with tax-free scholarship, fellowship, grant, or education savings account funds such as a Coverdell education savings account, tax-free savings bond interest or employer-provided education assistance. The same rule applies to expenses you pay with a tax-exempt distribution from a qualified tuition plan, except that you can deduct qualified expenses you pay only with that part of the distribution that is a return of your contribution to the plan.

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Page Last Reviewed or Updated: January 29, 2009

[FortLaudy 10]

This is very helpful, thanks so much! We've decided that well go to H&R Block come tax time as we're both a little clueless on the subject... I kept all my tuition expense receipts but some of the textbook receipts I threw out, dang!