Tax questions (merged)

[Fabian&Rossy 120]

I see this topic often in VJ and it can really get confusing. What I gathered from the experience of a close friend that went thru the process and from multiple posts in these forums is the following: During the NVC process, the manner in which you report your status in your income tax returns makes no difference. You will present your tax forms as part of your Affidavit of Support and that is all NVC will look at; the dollar figures to make sure it substantiates your ability to support your spouse. Case in point, the post above from Memphis, as well as posts from many other VJ members saying NVC did not give them any issues.

However, your marital status WILL matter on subsequent tax returns once your spouse is in the US and you are working on the Adjustment of Status. This time, you may present your tax returns, not as proof of income, but as proof of commingling finances with your spouse. My advice is leave your last year's tax return as is and if you wish, file 2013 as married filing separately.

Also, everyone careful with some of the tips about redoing previous taxes in order to get a bigger refund. If you decide to amend previous tax declarations to include your spouse in a joint return, then legally you need to also report any foreign income your spouse received during that particular year (from my close friend's case). This last part is a complicated topic that should be discussed with a real tax attorney, and not just any tax preparer.

[scienceworks 64]

I see this topic often in VJ and it can really get confusing. What I gathered from the experience of a close friend that went thru the process and from multiple posts in these forums is the following: During the NVC process, the manner in which you report your status in your income tax returns makes no difference. You will present your tax forms as part of your Affidavit of Support and that is all NVC will look at; the dollar figures to make sure it substantiates your ability to support your spouse. Case in point, the post above from Memphis, as well as posts from many other VJ members saying NVC did not give them any issues.

However, your marital status WILL matter on subsequent tax returns once your spouse is in the US and you are working on the Adjustment of Status. This time, you may present your tax returns, not as proof of income, but as proof of commingling finances with your spouse. My advice is leave your last year's tax return as is and if you wish, file 2013 as married filing separately.

Also, everyone careful with some of the tips about redoing previous taxes in order to get a bigger refund. If you decide to amend previous tax declarations to include your spouse in a joint return, then legally you need to also report any foreign income your spouse received during that particular year (from my close friend's case). This last part is a complicated topic that should be discussed with a real tax attorney, and not just any tax preparer.

There is foreign income exclusion upto 95000. So you include your spouse's income and then exclude it which mean you get a bigger refund.

[Fabian&Rossy 120]

There is foreign income exclusion upto 95000. So you include your spouse's income and then exclude it which mean you get a bigger refund.

Hello science, I don't think that is how the Foreign Earned Income Exclusion works. My understanding is you have to be a USC or LPR living abroad due to business while still keeping domicile in the US; but I could be wrong. Nonetheless, the foreign income still needs to be reported to the IRS.

The more the reason to consult a real tax attorney for each specific situation. Cheers!

[scienceworks 64]

Hello science, I don't think that is how the Foreign Earned Income Exclusion works. My understanding is you have to be a USC or LPR living abroad due to business while still keeping domicile in the US; but I could be wrong. Nonetheless, the foreign income still needs to be reported to the IRS.

The more the reason to consult a real tax attorney for each specific situation. Cheers!

I have been reading from IRS , that if SSN/ITIN # is available, you can do what I said.

[christeen 966]

Hello science, I don't think that is how the Foreign Earned Income Exclusion works. My understanding is you have to be a USC or LPR living abroad due to business while still keeping domicile in the US; but I could be wrong. Nonetheless, the foreign income still needs to be reported to the IRS.

The more the reason to consult a real tax attorney for each specific situation. Cheers!

No thatis not a correct assumption of how the foreign income exclusion works... , They do not have to be abroad only for business to take the foreign income exclusion... If a citizen or LPR is living outside of the USA for 330 days, you can exclude 97k ... You file the 2555 ... But they have to have a SSN or iTin to do this... Otherwise you file married filing single.

[Fabian&Rossy 120]

I have been reading from IRS , that if SSN/ITIN # is available, you can do what I said.

However, the Foreign Earned Income Exclusion will not apply if the foreign income is earned by the spouse who is not a USC or a LPR (yet) and has never lived in the US.

I am sorry OP and everybody, I did not mean to hijack this thread.

[JnRMo 16]

It's technically a federal crime to intentionally lie on a tax return and misrepresent yourself as married when single, or single when married, for example. Just because you got married in another country doesn't magically mean that you aren't married.

It's highly unlikely they would bother going after him for fraud for this, considering the burden of proof in showing actual intent to commit fraud the IRS follows is quite high. However, they will go after him for money in the event he would owe more, and he would be fined.

Assuming they weren't yet living together in the U.S., I believe it's optional whether you continue to file as single or jointly: http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad---Nonresident-Alien-Spouse

Edited January 10, 2014 by JnRMo

[christeen 966]

Correct, unless you are using an ItIn for your spouse and filing jointly (in other words taking the extra deduction) ... If they Do not have a SSN or itin you can only file married filing seperate and amend after they arrive or get #

It's highly unlikely they would bother going after him for fraud for this, considering the burden of proof in showing actual intent to commit fraud the IRS follows is quite high. However, they will go after him for money in the event he would owe more, and he would be fined.

Assuming they weren't yet living together in the U.S., I believe it's optional whether you continue to file as single or jointly: http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad---Nonresident-Alien-Spouse

They probably would not go after anyone however it is NOT optional to file single... Married is married and you must file as such..

[rin and john 71]

Technically filing as single when married is incorrect. The IRS will not pursue this error as it causes you to pay either the same or more tax.

If you think your spouse will be in the USA before April 15th, you should wait to file your 2013 return. If not, and they will be here by Oct 15th, you can file for a six month extension. Once your spouse is in the USA, get a SSN. Then file taxes. If it will be after October 15th then you can file for an ITIN (you could actually do that now, but it's a bit of a hassle).

Married filing jointly will increase most couple's return unless the foreign spouse made over $100,000 in 2013 as the foreign spouse can claim a foreign income exemption. So the USC's taxes decrease using MFJ vs MFS.

OP - once your spouse is here and has a SSN, fill in an amended return (1040X) for 2012 and see if it gives you an additional return. If so, file it.

And fire your tax preparer. Most tax preparer services have no idea about treating a foreign spouse as a tax resident (possible even when they are not in the USA). They work on completing as many simple returns per day as they can.

[rin and john 71]

However, the Foreign Earned Income Exclusion will not apply if the foreign income is earned by the spouse who is not a USC or a LPR (yet) and has never lived in the US.

I am sorry OP and everybody, I did not mean to hijack this thread.

This is incorrect.

A foreign spouse of a USC can elect to be treated as a resident for tax purposes. Once they do that, they can file MFJ, but by filing MFJ worldwide income of both individuals is subject to US tax. The Foreign Earned Income Exclusion would apply to any income either one of them earned overseas.

[Sukie 1,440]

All of this discussion just proves that you need to get proper tax advice from a tax preparer that is familiar with two-country families!

And...like someone mentioned above, it all depends on timing.

Our case:

We married in March, 2013, so for this US tax year, we will file "Married, Filing Jointly".

But...we are still stuck in I-130 la-la land (otherwise known as the Texas Service Center) and there is no way we'll have my spouse's green card by April 15th.

So we have two options: ITIN or Extension

Perhaps it is my paranoia - but I feel that filing an extension puts a big red mark on your tax file that says "Audit ME! Audit ME!

But trying to get an ITIN when your spouse is in another country, AND, you are in the process of getting a green card is really hard.

In order for my spouse to get an ITIN in time for me to file, she would either have to mail her passport to the IRS (for identity purposes) OR she'd have to mail her passport to the US Embassy in Sydney to get her passport "certified".

The IRS in the US says they will return the passport within 60 days. That's TWO MONTHS! She cannot be without her passport for two months right now! And, I love how the IRS says, "If you don't have your passport back within 65 days, call us, and we'll see what we can do." I mean, REALLY!

So I think we are going to go the Sydney route - we'll express mail the passport down there, and include an express mail envelope to get it back. Hopefully, she'll won't be without her passport for more than two weeks. I have more confidence in the US Embassy than I do with the IRS!

We could file an extension, but I am due to get a very large refund this year, and I do not want to delay that! We need the refund!

Again: be very careful, and get the right tax help!

Sukie

[WaitingStill 24]

Hello Michey

You have a lot going on, and you've gotten some good advice. I'll try to give you something you can work with.

1. Filing status. Hypnos is correct in explaining that your status is determined as of the last day of the year. If you were married on Dec. 31st, then your filing status can only be Married Filing Jointly, or Married Filing Separately. It is possible to amend your return by filing form 1040X (and CA has the state version, 540X). But you have three years from the date the return was due to amend, so don't rush it right now.

2. To file a tax return with your husband, he needs a tax identification number. If he is eligible for a social security number, he has to apply by filing form SS-5 at your local social security office. If he does not have his visa yet, then he is ineligible and needs an ITIN. The IRS certifies certain tax professionals as "ITIN Acceptance Agents." Find one locally and they will take care of it. Don't try to do it yourself.

3. There has been a discussion of how to report foreign income but I do not know if this is an issue for you so I will leave it alone. There is not enough info in this discussion to advise you properly. Just understand that the rules regarding foreign earned income apply to US citizens and Resident Aliens. If your husband is a nonresident alien, you can choose to have him considered a resident alien for tax purposes by attaching a declaration to your tax return. Again, this is an involved procedure and you should seek advice from a local tax professional.

Remember that once your husband becomes eligible for a social security number, he can no longer use the ITIN.

Obviously, everything will be much easier for you if you wait until your husband is physically present in the U.S. If there is no pressing reason for you to file by April 15th, you can get 6 month extensions from both the IRS and the FTB. The IRS will want you to file a request for extension, form 4868. The FTB grants the extension automatically. Be aware that if you owe taxes, interest begins to accrue as of April 15th. The extension is for filing, not paying.

Good luck.

[michey8988 2]

Hello Michey

You have a lot going on, and you've gotten some good advice. I'll try to give you something you can work with.

1. Filing status. Hypnos is correct in explaining that your status is determined as of the last day of the year. If you were married on Dec. 31st, then your filing status can only be Married Filing Jointly, or Married Filing Separately. It is possible to amend your return by filing form 1040X (and CA has the state version, 540X). But you have three years from the date the return was due to amend, so don't rush it right now.

2. To file a tax return with your husband, he needs a tax identification number. If he is eligible for a social security number, he has to apply by filing form SS-5 at your local social security office. If he does not have his visa yet, then he is ineligible and needs an ITIN. The IRS certifies certain tax professionals as "ITIN Acceptance Agents." Find one locally and they will take care of it. Don't try to do it yourself.

3. There has been a discussion of how to report foreign income but I do not know if this is an issue for you so I will leave it alone. There is not enough info in this discussion to advise you properly. Just understand that the rules regarding foreign earned income apply to US citizens and Resident Aliens. If your husband is a nonresident alien, you can choose to have him considered a resident alien for tax purposes by attaching a declaration to your tax return. Again, this is an involved procedure and you should seek advice from a local tax professional.

Remember that once your husband becomes eligible for a social security number, he can no longer use the ITIN.

Obviously, everything will be much easier for you if you wait until your husband is physically present in the U.S. If there is no pressing reason for you to file by April 15th, you can get 6 month extensions from both the IRS and the FTB. The IRS will want you to file a request for extension, form 4868. The FTB grants the extension automatically. Be aware that if you owe taxes, interest begins to accrue as of April 15th. The extension is for filing, not paying.

Good luck.

Will that be a problem with nvc? for year 2012 taxes I filed single? I am in the NVC stage and I know that I will be sending them a copy of my recent tax return.. for my 2013 taxes I'll file an extension until my husband comes here.

Edited January 10, 2014 by Ryan H

[srloring13 12]

Another option is to submit an ITIN application along with all the required documents with your 2013 tax return and when you get that back, use it to file an amended 2012 return. In any case it would be best to talk to someone at IRS to find out the best way to proceed. I would definitely ask if you can submit an ITIN application with an amended 2012 return.

[Ryan H 3,791]

Multiple separate posts containing only quotes and replies have been merged into one post.