Tax question

[chimanrao 1]

Can anyone help with the following questions please:

The silly question- 1) I got married July 2011. For my returns, do I need to include her income from July 2011 till Dec 2011? Or the entire year?

The complicated question- 2) She earned her income in Australia, while I was living in India. She moved to India toward the end of 2011. Is there any particular way I should structure my taxes so I dont get slapped a huge sum?

Is there any good tax related forum on which I can post my question?

Thank you!

[BBCC 16]

Referring to filing a US tax return for 2011? If so, without getting too specific, she specifies ALL her income from ALL sources in ALL countries for 2011.

Do some research on whether she can claim the Foreign Earned Income exclusion OR Foreign Tax Credit (don't think you can do both). That will soften the tax burden somewhat.

I probably shouldn't get more into specifics here as this is a visa forum but it sounds like you're doing this so you can start the CR-1 process?

Not much more help without more specific info from you.

Good luck.

[Scott & Ale 3]

You have a choice in how you file your 2011 tax return. You have to make an election to treat her as a full year resident (even though she is not a resident) or a non resident alien.

1. Full year residents pay income tax on the full year whether married on Jan 1 or Dec 31. I assume she has no SSN so she would need to get an ITIN in order to file this way. Depending upon time in these other countries, you both may be eligible for the foreign earned income exclusion. The foreign tax credit may also help too, the foreign tax credit avoids double taxation, so if your US income taxes are calculate to be $100 but you already paid $90 in Australian income taxes, you only owe $10 for the difference. The IRS just wants you to be taxed at the US tax rate globally is the goal.

2. Non-resident alien's only have to pay income tax to the US for income earned in the US. You do not claim her as a dependent. I believe, but am not certian, that you file for married filing separetly so you essentially just pay income tax like you are single but don't get taxed on her earnings.

Edited July 20, 2012 by Scott & Ale