Specific Tax Filing Scenario - Married with less than 31 days to go in 2011.

[bebop 0]

Hi everyone,

My wife and I are having some difficulty with understanding our tax liability for 2011.

I was under the impression that we could file 'married filing jointly' if I elected to be treated as a tax resident for 2011 (we were married mid Dec 2011), however on the IRS website it says I can only elect to be treated as a tax resident if I spent 31 consecutive days in the US in 2011 (I didn't, moved in mid Dec).

The reason I ask is that instead of my wife being able to file as head of household, she now has to file as married filing separately and we will owe the IRS over $1000.

Is there any way to work around this?

If not I advise anyone ever getting married in December to wait until 1st January to do it as it could cost you a fortune.

I called the IRS but they weren't too much help and just gave me a few confusing options which seemed like I couldn't follow once I read the instructions.

Thanks for any help.

PS Sorry if this is the wrong place to ask this.

[Reyan 56]

This is the IRS provision you fall under, since your spouse does not meet the Substantial Presence Test; you cannot file electronically as well:

Nonresident Spouse Treated as a Resident

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

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 information:

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 U.S. residents for the entire tax year

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

http://www.irs.gov/businesses/small/international/article/0,,id=96370,00.html

Good luck

Edited March 16, 2012 by Reyan

[Oksana & Max 94]

Here are few questions that you need to answer.

1. Did you got your Social Security prior to January 1st? Because if you didn't had one not sure, how you will be able to file.

2. Have you tried Married Filing Separately? Since you didn't had any income it may be beneficial to do it that way.

As far as IRS concerned if you got married even on December 31st, you've been married all year. It could be beneficial in some cases.

How did your husband was planning to file as a Head of Household, did he have other dependents, besides you that qualify him, if you are the only dependent then filing jointly actually would give you a bigger refund.

How about consulting a tax professional as well.

[ghanalover 7]

Well I guess im in trouble I got married nov it was my understanding that u had to be married for more than 6 months in that year so I filed hoh

[Oksana & Max 94]

Well I guess im in trouble I got married nov it was my understanding that u had to be married for more than 6 months in that year so I filed hoh

You are not in trouble you have the option to file as HOH, though I think you will benefit better from married filing jointly.

[Reyan 56]

Just amend your tax return if you filed as HOH (1040X) in error. You need to fully read the instructions on 1040X, because it is not just filling the form and submitting it.

http://www.irs.gov/pub/irs-pdf/i1040x.pdf

Oh yes, filing as married filing jointly has a higher standard deduction that HOH which of course is a good thing.

Good luck.

Edited March 16, 2012 by Reyan

[Reyan 56]

Here is the IRS publication on this subject.

http://www.irs.gov/publications/p519/ch01.html#en_US_publink1000222193

[Dave&Roza 748]

This is the IRS provision you fall under, since your spouse does not meet the Substantial Presence Test; you cannot file electronically as well:

Nonresident Spouse Treated as a Resident

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

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 information:

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 U.S. residents for the entire tax year

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

http://www.irs.gov/b...d=96370,00.html

Good luck

My wife and I were married on December 30th. I filed married filing jointly as that was the best tax advantage for us. I enclosed a statement signed by both of us that my wife wanted to be considered as a US resident for tax purposes for the entire year. I then included her wages from her job in Kazakhstan and converted KZT to USD based on the OMB official website for converting foreign currency into USD for government employees. I then had to mail the return in. That saved me about $8k over filing single or even married filing seperately.

Which ever method saves you the most money is the way I would go. Turbo Tax does have problems with foreign income and since it was not on a W-2 I just pretended the wife's income was reported on a 1099-MISC.

Good luck,

Dave

[bebop 0]

Hmm so even though I don't meet the requirement to file as a resident alien I still can?

This is what's confusing me. Some people say that even as a NR I can write a letter to ask to be treated as a resident alien, but the IRS site says I need to have spent 31 consecutive days in the US to do that.

It's a pretty big deal as us filing jointly and excluding my income leads to a $1000 return, and her filing separately and me not filing (I don't meet the requirements to file as a NR-alien), means she owes $1k.

[Reyan 56]

I recommend you re-read what I wrote and linked in post #2. The 31 days is basing your US residence under:

Substantial Presence Test

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2011. To meet this test, you must be physically present in the United States on at least:

31 days during 2011, and

183 days during the 3-year period that includes 2011, 2010, and 2009, counting:

Since you are unable to claim resident under this test, then you can base it under the following:

Nonresident Spouse Treated as a Resident

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

If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year. Neither you nor your spouse can claim under any tax treaty not to be a U.S. resident. You are both taxed on worldwide 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.

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 information.

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 U.S. residents for the entire tax year.

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

If you are still unsure/confident on what to do, then I suggest you get the service of an accountant/CPA. What I provided is all written under IRS Publication 519.

http://www.irs.gov/publications/p519/ch01.html#en_US_publink1000222193

Edited March 16, 2012 by Reyan

[bebop 0]

I recommend you re-read what I wrote and linked in post #2. The 31 days is basing your US residence under:

Substantial Presence Test

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2011. To meet this test, you must be physically present in the United States on at least:

31 days during 2011, and

183 days during the 3-year period that includes 2011, 2010, and 2009, counting:

Since you are unable to claim resident under this test, then you can base it under the following:

Nonresident Spouse Treated as a Resident

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

If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year. Neither you nor your spouse can claim under any tax treaty not to be a U.S. resident. You are both taxed on worldwide 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.

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 information.

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 U.S. residents for the entire tax year.

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

If you are still unsure/confident on what to do, then I suggest you get the service of an accountant/CPA. What I provided is all written under IRS Publication 519.

http://www.irs.gov/publications/p519/ch01.html#en_US_publink1000222193

Thanks for your help - really appreciate you clarifying it for me as I was a bit confused.

[Kathryn41 3,205]

Topic has been moved from the AOS forum as it is not an AOS related question but one related to living as a new resident n the US.

[Darnell 8,478]

My wife and I were married on December 30th. I filed married filing jointly as that was the best tax advantage for us. I enclosed a statement signed by both of us that my wife wanted to be considered as a US resident for tax purposes for the entire year. I then included her wages from her job in Kazakhstan and converted KZT to USD based on the OMB official website for converting foreign currency into USD for government employees. I then had to mail the return in. That saved me about $8k over filing single or even married filing seperately.

Which ever method saves you the most money is the way I would go. Turbo Tax does have problems with foreign income and since it was not on a W-2 I just pretended the wife's income was reported on a 1099-MISC.

Good luck,

Dave

you included the W-7 ITIN app, her ID, and sent all to the special W-7 address in Austin TX, yes?

My wife and I did that for TY 2010 in December 2011, got a nice paper check (because of the lag) and I had a power of attorney doc in hand, from her, to deposit the check.

Then we filed TY2011 in February, electronically, had a refund within 3 weeks via ACH.

There's a topic about this in the China forum, if'n you (or others) wish to have a read.

Hmm so even though I don't meet the requirement to file as a resident alien I still can?

This is what's confusing me. Some people say that even as a NR I can write a letter to ask to be treated as a resident alien, but the IRS site says I need to have spent 31 consecutive days in the US to do that.

It's a pretty big deal as us filing jointly and excluding my income leads to a $1000 return, and her filing separately and me not filing (I don't meet the requirements to file as a NR-alien), means she owes $1k.

please to review the IRS Form W-7, this weekend, prepare to submit a paper return with the W-7 and the appropriate ID, along with that letter.

Good Luck !

[Reyan 56]

If you don't already have a SSN, then what Darnell says about requesting for an ITIN (W7) is the correct path to take.

Edited March 17, 2012 by Reyan

[Dave&Roza 748]

you included the W-7 ITIN app, her ID, and sent all to the special W-7 address in Austin TX, yes?

Actually, no. We had her SSN by then. Applied for SSN on January 10th and received the printout of the number on January 31st and received the actual card February 18th. Filed taxes end of February and received refund mid-March or so. This year we will file electronically. There is plenty of time to get a SSN if you get married by the end of the year unless the I-94 is within two weeks of expiring and you have to wait for the GC. Then I would follow your advice about the ITIN or a person could file for an extension that gives them until September to file. Just make very certain that all taxes owed are paid by the April deadline or you incurr interest and penalities.

So your options are 1) obtain a SSN and file taxes, 2) obtain an ITIN and file your taxes, or 3) file an extension and file your taxes after receiving the SSN based on the GC or EAD card (one would hope 9 months is enough time to receive a GC or EAD), or 4) not recommended but it is there, file your taxes without the SSN and then file an admended return to add the SSN.

Good luck,

Dave