which is the best tax filing status?

[Oliver and Lisa 0]

Hello to everyone,

I need some help, hope someone can help me to decide what is the best thing to do about filing tax, We got married last July and i started working only first week of october '08, I understand that if we file joint we can save but someone told me that if we file separately i can have full refund, So my question is can i still pursue about filing jointly since i only work three months?

thanks in advance

[Jasman0717 8]

You usually get a better tax break if you file joint. Do you have any write offs like mortgage or health expenses? If not you can probably just do the 1040ez both ways and see what way saves you the most money.

[supranatural 1]

You filing status for the year is determined by your marital status at the end of the year. Does not matter how many months you worked. If you are married as of Dec. 31 this year, you can file jointly or separately, however you wish. This is straight from the mouth of my accountant.

[desert_fox 32]

If you file separately, your husband will have to file separately also. You may get your taxes refunded but it wil cost him a fortune....overall, you will be worse off. Compute it both ways on TURBOTAX.com and see what the effects are. Doesnt cost ya anything until you actually file with TURBOTAX.

[SMASHROX 0]

I feel inclined to reply being a tax accountant. The majority of people are better of filing married as filing separately might limit certain deductions, etc. Also, if the beneficiary had a job prior to arrival in the US you will need to consider the US tax implications of their wages as well. What I mean is, in the US, you are taxed on your WORLDWIDE income. The US government will generally make you whole by allowing a tax credit for taxes the beneficiary paid on their income prior to arrival in the US.

Sorry to get so technical but the intent is to arm you with information.

[katand7 0]

Each situation is different, but generally speaking the couple as a whole does much better filing "married filing jointly". You are entitled to a higher standard deduction. If you itemize deductions then it gets more complicated. If you didn't work very much then you probably didn't have much taken out in federal taxes. Your refund is based on how much you paid in. The only money you can get back over and above what you paid in is in the form of credits, such as earned income credit. To receive this you generally must be able to file head of household and to do that you must have a dependent that you supported more than half the year. With your limited income it would be hard to meet that requirement. Plus if you decide to file "head of household" or "married filing separately" then there may be a bigger consequence to your spouse who worked all year.

There are many websites out there that you can use to do some calculations. As a previous poster said, you can use turbotax and determine what the best way to file is before submitting anything to the IRS for processing. You can also call the IRS directly and speak with a representative who can help you determine what filing status you qualify to use. That is a totally free service. Alternatively you could consult with a tax professional.

I hope this helps a little. Good luck with everything.

Kathleen

P.S. - I am NOT a licensed tax professional. I have tax preparation experience and am a former IRS employee. (that was 15 yrs ago) Everything I have said here is my own opinion based upon my own knowledge. Ok, that is the best disclaimer I can come up with

[Jigi 0]

hi,

File Joint

Jigi

[Chris Parker 10]

I feel inclined to reply being a tax accountant. The majority of people are better of filing married as filing separately might limit certain deductions, etc. Also, if the beneficiary had a job prior to arrival in the US you will need to consider the US tax implications of their wages as well. What I mean is, in the US, you are taxed on your WORLDWIDE income. The US government will generally make you whole by allowing a tax credit for taxes the beneficiary paid on their income prior to arrival in the US.

Sorry to get so technical but the intent is to arm you with information.

If they file married separately, the non-citizen may also need to file as a "dual-status alien" for tax purposes if they arrived after January 1 of the same year. That means they would not be taxed by the U.S. on WORLDWIDE income received before they came to the U.S. and can claim tax treaty benefits, however they also would not be allowed the standard deduction or the earned income credit on their U.S. income while a resident after they arrived.

The ability to be treated as a resident all year, be taxed by the U.S. on all worldwide income, and file a joint return with a U.S. spouse is an election right, not a requirement. If you make the election, the foreign earned income credit may help to avoid actually paying tax on that worldwide income before becoming a resident.

From IRS:

Dual Status Aliens Married to U.S. Citizens or Resident Aliens

A dual status alien married to a U.S. citizen or to a resident alien may elect to file a joint income tax return with his/her U.S. citizen or resident alien spouse. Refer to "Nonresident Spouse Treated as a Resident" in Publication 519, U.S. Tax Guide for Aliens.

Edited February 26, 2008 by Chris Parker

[KEK 0]

I know this might sound like a dumb question, but I just want to make sure I understand. I got married in 2007, but my husband still has not received his CR-1 visa. I read the Publication 519, and it seems like my husband is considered a nonresident alien. He was here for vacations in 2007 for greater than 31 days, but for less than 183 days. Also his "tax home" would be his home country (Saudi Arabia), where he works, even though they don't pay taxes over there? (He did not have any income from US, and has employment only in that country).

So does this mean I can file as "married filing separately", and he does not have to file one at all? Also, I am guessing I would not claim him as a dependent since he has his own income. Does that seem like the correct way to do it?

My father helps me with my taxes as he knows a lot more than me, but even he is having trouble figuring out all this, so I am trying to help.

Thanks ahead for any information that anyone can share with me,

KEKhan

[rin and john 71]

This was discussed a few days ago. Someone linked to a post from two years ago.

http://www.visajourney.com/forums/index.php?showtopic=109

I thought it explained the options very well.

In my individual case, Rin and I married in October 2006 and she did not enter the USA until April 2007. Since she had very little income for 2006 in Thailand, it was far better for her to "declare" (via a letter attached to our return) that she wanted to be treated as a resident for 2006 tax purposes. By doing that we could file "married, filing jointly".

John

[lucyrich 19]

A complication this year that wasn't a factor in previous years is the economic stimulus rebates.

If you file a joint return and one spouse uses an ITIN instead of a social security number, then neither member of the couple gets the stimulus rebate.

If you file as "married filing separately", a spouse who uses a social security number will be eligible for the rebate, typically $600.00. The other spouse might not need to file at all, depending on individual circumstances.

So, if one spouse is out of the country and not yet eligible for a social security number, you'll have to determine whether the savings in tax rates and such due to filing a joint return outweighs the tax stimulus rebate you'd give up by filing a joint return with an ITIN. The only sure way is to figure your taxes both ways and compare.

http://www.irs.gov/newsroom/article/0,,id=179181,00.html

[rin and john 71]

A complication this year that wasn't a factor in previous years is the economic stimulus rebates.

If you file a joint return and one spouse uses an ITIN instead of a social security number, then neither member of the couple gets the stimulus rebate.

If you file as "married filing separately", a spouse who uses a social security number will be eligible for the rebate, typically $600.00. The other spouse might not need to file at all, depending on individual circumstances.

So, if one spouse is out of the country and not yet eligible for a social security number, you'll have to determine whether the savings in tax rates and such due to filing a joint return outweighs the tax stimulus rebate you'd give up by filing a joint return with an ITIN. The only sure way is to figure your taxes both ways and compare.

http://www.irs.gov/newsroom/article/0,,id=179181,00.html

The issue about the stimulus rebate is correct. You won't receive it automatically without valid SSN's for both you and your spouse on your return. But you will be able to get it next year for 2007 if your spouse gets a SSN any time this year (or next).

From the IRS website:

"Can you use an ITIN instead of an SSN? Taxpayers with an Individual Taxpayer Identification Number (ITIN) instead of an SSN are not eligible to receive a stimulus payment. Both people listed on a "married filing jointly" return must have valid SSNs to qualify for the payment — if only one has a valid SSN, neither can receive the payment.

Not eligible at the current time? If your circumstances change and you become eligible after you file your 2007 federal tax return, you can always file an amended return using Form 1040X. If you're not eligible this year but you become eligible next year, you can claim the economic stimulus payment next year on your 2008 tax return."

So you will eventually get the stimulus money so long as you have a valid SSN for your spouse before the end of 2008. If you file as "married filing separately" you would not only lose the "married filing jointly" exemption benefit, but would lose the other "half" of your future stimulus adjustment once your SO has their SSN.

Best regards,

John