Another Tax Question

[floridadave 195]

That time of year. Quick question, but first some background:

1. I am the USC and never resided outside the U.S. in 2011.

2. We married in China in April 2011.

3. Wife received CR-1 visa Feb. 2, 2012

4. Wife entered U.S. POE as LPR Mar. 2, 2012

5. Wife never set foot in U.S. prior to her POE on Mar. 2, 2012.

6. Wife received SSN card March 17, 2012

7. I have been studying this issue for many long hours and now my head hurts.

Question: Can I file Married, Filing Jointly for 2011 and exclude her 2011 foreign income, or must I file Married, Filing Separately because she never set foot in the U.S. during 2011?

Hint: She doesn't appear to meet the Green Card Test or the Substantial Presence Test for 2011 in pub 519.

I have read Pub's. 519 and 501 and I'm still confused. Any help will be appreciated.

Edited March 26, 2012 by floridadave

[danat 1]

That time of year. Quick question, but first some background:

1. I am the USC and never resided outside the U.S. in 2011.

2. We married in China in April 2011.

3. Wife received CR-1 visa Feb. 2, 2012

4. Wife entered U.S. POE as LPR Mar. 2, 2012

5. Wife never set foot in U.S. prior to her POE on Mar. 2, 2012.

6. Wife received SSN card March 17, 2012

7. I have been studying this issue for many long hours and now my head hurts.

Question: Can I file Married, Filing Jointly for 2011 and exclude her 2011 foreign income, or must I file Married, Filing Separately because she never set foot in the U.S. during 2011?

Hint: She doesn't appear to meet the Green Card Test or the Substantial Presence Test for 2011 in pub 519.

I have read Pub's. 519 and 501 and I'm still confused. Any help will be appreciated.

hi Dave,

I'm not a tax expert but ran into the same issue with my wife. Best bet is to check with a tax expert.

In my situation, my wife was not in the USA but we were married in her country at the beginning of the previous year. I had 3 options for filing.

1. Head of household where I could claim an exemption for wife and other family members.

2. Married filing separate - resulting in lower tax benefit but would not have to report wifes non us income.

3. Married filing jointly - would have to report and possibly pay tax on wifes income depending on other factors.

I decided to go the simple route and just file married filing separate. My wife didn't have an ssn so I had to mail in the return with an itin app attached. Of course since your wife has her ssn you can skip that part.

So you do have a few options but only a tax pro can give the best advice based on your individual situation.

But just remember if you do elect to treat her as an ra for tax purposes for 2011 you do have to report the worldwide income for you and your wife.

hope that helps and good luck

Dan

[danat 1]

That time of year. Quick question, but first some background:

1. I am the USC and never resided outside the U.S. in 2011.

2. We married in China in April 2011.

3. Wife received CR-1 visa Feb. 2, 2012

4. Wife entered U.S. POE as LPR Mar. 2, 2012

5. Wife never set foot in U.S. prior to her POE on Mar. 2, 2012.

6. Wife received SSN card March 17, 2012

7. I have been studying this issue for many long hours and now my head hurts.

Question: Can I file Married, Filing Jointly for 2011 and exclude her 2011 foreign income, or must I file Married, Filing Separately because she never set foot in the U.S. during 2011?

Hint: She doesn't appear to meet the Green Card Test or the Substantial Presence Test for 2011 in pub 519.

I have read Pub's. 519 and 501 and I'm still confused. Any help will be appreciated.

That time of year. Quick question, but first some background:

1. I am the USC and never resided outside the U.S. in 2011.

2. We married in China in April 2011.

3. Wife received CR-1 visa Feb. 2, 2012

4. Wife entered U.S. POE as LPR Mar. 2, 2012

5. Wife never set foot in U.S. prior to her POE on Mar. 2, 2012.

6. Wife received SSN card March 17, 2012

7. I have been studying this issue for many long hours and now my head hurts.

Question: Can I file Married, Filing Jointly for 2011 and exclude her 2011 foreign income, or must I file Married, Filing Separately because she never set foot in the U.S. during 2011?

Hint: She doesn't appear to meet the Green Card Test or the Substantial Presence Test for 2011 in pub 519.

I have read Pub's. 519 and 501 and I'm still confused. Any help will be appreciated.

hi Dave,

I just wanted to add, You can file joint or separate and it does not matter if she set foot in the USA. She just has to have an itin or ssn. That said you just are giving permission for the gov to tax her non us income which may or may not be a problem depending on your situation.

[Darnell 8,478]

Hey Dave - other China folk have been in your exact situation,

and filed a paper return with the new SSN (most electronic checking for online filing fails the first time, as her SSN not exist with IRS yet, though it exists with SSA) with ACH / deposit on the refund amount.

Can use the 2555 to exclude her foreign income as non-taxable income (I think that's the right form) .

You won't read much about those China folk here, alas. Have you visited the other sites?

[floridadave 195]

Thanks for the info danat.

Darnell, I have not visited other sites. Any you have in mind?

Edited March 26, 2012 by floridadave

[floridadave 195]

Hey Dave - other China folk have been in your exact situation,

and filed a paper return with the new SSN (most electronic checking for online filing fails the first time, as her SSN not exist with IRS yet, though it exists with SSA) with ACH / deposit on the refund amount.

Can use the 2555 to exclude her foreign income as non-taxable income (I think that's the right form) .

You won't read much about those China folk here, alas. Have you visited the other sites?

Any suggestions for "other sites?" Thanks.

[floridadave 195]

hi Dave,

I just wanted to add, You can file joint or separate and it does not matter if she set foot in the USA. She just has to have an itin or ssn. That said you just are giving permission for the gov to tax her non us income which may or may not be a problem depending on your situation.

I see. Then I'll probably opt for filing joint and, as Darnell suggested, attach a 2555-EZ to exclude her 2011 foreign income. Funny thing about the 2555-EZ: in the instructions is a worksheet whereby it turns out the foreign income is taxed to an extent. Still not as bad as filing separate but not as good as having the foreign income 100% excluded.

[floridadave 195]

This is what I finally did:

I first went to the local IRS office and they said they can not help with foreign type questions. That was a waste of 2 hours sitting. I was told to call the IRS individual tax help number at 1 800 829-1040.

I called IRS 800 number and I gave them the same information I listed above in my initial post, but I didn't tell them my head hurts. Using a script, the IRS rep interviewed me for about 20 minutes asking me perhaps more than a dozen or so questions to determine if we qualify. The questions centered on whether she was a resident for tax purposes and whether we qualify for the Foreign Earned Income Exclusion. At the end of the interview he said yes, we can claim the Foreign Earned Income Exclusion. He said to attach to the 1040 the 2555-EZ and a statement that me and the wife desire to be treated as residents for the whole tax year, that we can't claim the foreign tax credit, and that I had to use the 2555-EZ worksheet included in the 2555-EZ instructions. Those were pretty much the major points he made. After initially being routed to the wrong person the whole call plus interview time was a little over 2 hours.

Whew, my wife had a much easier time with her 5-minute visa interview. Outrageous. Anyway, mission accomplished. Hope this helps somebody out there. My head is feeling a little better too now that this nightmare is over.

Edited March 27, 2012 by floridadave

[bigdog 376]

Fun is just beginning. We go lucky, wife here and no income, filed joint. See a tax professional if needed. Pretty sad when the visa interview is easier than dealing with the IRS.

[floridadave 195]

Yes, it was a real pain. My problem was the issue of whether the wife was a resident or not for 2011. The IRS rep settled that when he told us to attach the letter saying we both wanted to be treated as residents for the whole year for tax purposes. It's the same letter you would file with a W-7. Turbo Tax almost gets you there, but even there, it's the residency issue and it doesn't tell you about the letter. A lot of trouble but I had to do it correctly, to the best of my ability, thinking ahead to ROC and citizenship for the wife.

Edited March 27, 2012 by floridadave

[Darnell 8,478]

glad to hear it's all sorted, now.

[flybird 0]

hi Dave,

I decided to go the simple route and just file married filing separate. My wife didn't have an ssn so I had to mail in the return with an itin app attached. Of course since your wife has her ssn you can skip that part.

So you do have a few options but only a tax pro can give the best advice based on your individual situation.

But just remember if you do elect to treat her as an ra for tax purposes for 2011 you do have to report the worldwide income for you and your wife.

hope that helps and good luck

Dan

Is the ITIN required when filing separate? Or only if applying join?