Zeffe

I don't know the world of taxes enough to know when joint and when separate makes sense. There are things that hinge off that Line 7 wage amount that could be affected by the combined numbers.

One is how taxes are figured if you have Schedule D capital gains. Taxes don't come straight off the tax table. There is a capital gains worksheet to calculate a tax figure and it starts with the higher joint income and trickles down. Then the foreign income worksheet figures the tax on the foreign portion and subtracts it from the calculation of the capital gain worksheet. I had that but still did better joint. So is there a spot where it isn't an advantage? I don't know.

Another might be Earned Income Credit. No experience with the calculations, but it is for poor individuals with children who work instead of welfare. They get "bonus money" so to speak...no tax and more money refunded than paid in. So a higher Line 7 might affect whether they qualify for the extra money. Totally speculating here because I have never done a tax return with EIC. Don't even know the rules. But the point is, some things might be affected by a larger wage before the point where the excluded taxes kick in.

And you probably want to examine whether if both live abroad, is there anything that prevents the foreign income exclusion. My example was quick and true for most VJ people for the first year the spouse or fiancé arrives. And it is true for those who live in separate countries.

As far as having to report to income of a non-USC/non-LPR--you don't HAVE to. You can file married separate. But if you CHOOSE to file joint, they must know the total income of the family. You can't get perks without disclosing the whole picture. Your choice.

Basically tax returns should be calculated both ways each year to make the decision. Laws, tax breaks, etc change every year.

Thank you. Incredibly helpful. My situation is complicated by the fact that my income is self-employment and my foreign spouse's is standard W-2 stuff.

At the end of the day, I may need to consult an expat tax accountant. What fun ;-)

Ok. Let's look at the tax tables for examples http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

Scroll down looking at various income levels and see how Married Filing Joint has a lower tax than both Single and and Separate for the same taxable income.

So summmary for this example of US income and foreign income

Married Separate (or Filing Single): Tax is $1808

Married Filing Jointly: Tax is $608

This is over simplified because everybody has different tax situations, but it is one example showing that reporting foreign income isn't a bad thing to be avoided. It could save you money.

YES you can file jointly with your husband. Some who have never stepped foot on American soil do it if they get an itin.. See Publication 519....around page 9 or 10 on the subject of electing to treat the non-resident spouse as a resident alien for tax purposes.

Wow, Nick. Thank you so much for taking the time to do these calculations!! And for correcting my assumption that a USC with a foreign/nonresident spouse can only file MJS.

I can see the financial sense in MFJ if both people earn under $97,600 per year (the current Foreign Earned Income Exclusion, http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion), although it feels somehow wrong to have to report income of a non-USC/non-LPR! Any idea at what stage it would make sense to go MFS? For example, if the foreign spouse makes more than the Foreign Earned Income Exclusion?

It makes sense if one spouse would get a return but jointly they would have to pay in. Another would be if a spouse is cheating on their taxes. By going separate each spouse would be responsible for their own taxes, penalties and audits so the other spouse would not be responsible for levies, etc.

I like the personal accountability bit! Could you clarify what you mean by "It makes sense if one spouse would get a return but jointly they would have to pay in"?

So if the American is living and working in the UK, would she have enough US income to even have a tax due? There is the foreign income exclusion approaching $100k now that would take a large chunk out of UK earned income. If at the end of the 1040, she owes zero tax, does it matter whether that is MFS? How can you do better than zero by filing joint?

What is the source of the American's income US or UK?

Hi Nick! The USC (me) is living in the UK but I'm here on a student visa. I don't work here. All of my income comes from freelance work I do for US-based clients. So each year I file a federal return prepared by an accountant in the US. (No state return needed because I don't spend enough time in the US annually.)

As far as I understand, because my husband is not a USC and (soon) no longer a green card holder, this means I don't (and he doesn't) need to declare his income to the IRS. But with that in mind, am I going to get taxed at a higher rate if I file MFS? I won't be able to file MFJ if my husband is a neither a USC nor a green card holder, so I'll have to go the MFS route. Do you know whether having to do that (MFS with a nonresident/citizen spouse) would screw me over financially? I'm guess still confused about the US tax implications of marriage...

She filed as Married filing separate since I did not have a SSN number or a TIN number and it would have been a lot of hassle to include my income. It did increase her tax liability since she filed separately. It would completely depend if you stand to gain from filing separately or jointly. The Foreign earned income exclusion was $97500 when my wife filed for her taxes as long as you earn below that and are out of the US for the full year you should be fine.

I would definitely advise you to use a CPA qualified in Foreign Income Tax. We used one and it helped a lot. They work out everything for you and will take care of all the forms for you and try to minimize your tax liability. Turbo Tax has a service called CPA intuit which is much cheaper than other CPA firms like H&R block etc. If you want I can send you the name of the CPA we used.

Hope this helps.

Many thanks. Right now, even though I am living in the UK all of my income comes from the US (self-employment). So I've been filing my federal return annually and not filing a state return because I am not in the US enough days per year. Last year, when I got married, was the first year I filed as married (filing separately). Any idea whether this would have increased my tax liability vs when I filed as single? Is there a hidden marriage tax that I stupidly didn't know about (even if the spouse is a foreign national residing outside the US)?

If you've never filed taxes jointly before and when you do you file married, filling separately then you are not lake f or any of his tax obligation and vice versa. It's the safety route to go and probably the best since I assume there's not a lot of deductions to claim.

I just wonder at what point it makes financial sense to file jointly vs. separately. Any clue(s)?

http://www.irs.gov/Individuals/International-Taxpayers/Frequently-Asked-Questions-About-International-Individual-Tax-Matters

So helpful! Thank you!

Your husband's SSN is his for the rest of his life. He will never lose it. He is only giving up his green card. In future years when you file your taxes, you will still use your husband's SSN.

Many thanks. So I will use his SSN on my tax filings but so long as he abandons his GC, he won't need to file with the IRS, right?

Have a pint for me. :-)

Done!

My suggestion: If you have the time, do some homework of your own. Peruse the material available online first so you can gauge how much understanding you have. Then contact the IRS embassy office in London and ask if they can refer you to an accountant. Normally these are certified and bonded. Also, consider checking with HR in your company if they have any such type of assistance for expats. Many companies do.

Great advice. Thank you. Had no idea the embassy even had an IRS office.

It's only 14:25pm here this is driving me to drink!

It all depends on the reciprocity agreements. For instance, it would work to your advantage if your spouse did not have a job in which case you would benefit from the better tax bracket for MFJ status. However, you may find out that once you work out your taxes with the Inland Rev Svc the taxable US amount be such that you would be exempt from filing or would have a small return or refund. Keep in mind that depending on your situation you will not be taxed for your entire overseas income.

The spouse (luckily?) has a job. Right now his income is below the maximum (pre-tax) limit set out in the US-UK tax treaty. But it sounds like if his income should exceed that number, then it would make more financial sense for me to file MFS?

As long as you're married to him. He's no longer liable for USA taxes, but you as a citizen will continue to need to file USA taxes. Your status will continue to be married. The best way of filing your taxes is going to depend on tax reciprocity with where you live and the USA, and all the other tax rules. Its probably gonna be complicated from here on out, and you'll want to discuss this with a competent tax accountant or attorney, at least to get an initial understanding of what's best for you. Unless you give up citizenship, the USA requires you to file your taxes. I've heard because of new banking regulations, many Americans in Europe are giving up citizenship, because the banks don't want the reporting headaches caused by the new USA laws and are refusing to give bank accounts to US citizens.

What a headache. Definitely time to find a competent tax specialist. Any thoughts on whether it's best to go with an accountant or attorney?

Of course, as with everything else tax-wise, the more you know the more you want to jump out of a window....

So true. If only we'd known before just how unfriendly the US tax code is toward globally mobile people...

If you file MFJ you will need to include his income as well.

Have a look at the tax treaty between the US and GB --> http://www.irs.gov/Businesses/International-Businesses/United-Kingdom-%28UK%29---Tax-Treaty-Documents

I hope this helps.

This helps enormously. But WOW, I am shocked that I'd need to include his income (for the MFJ option) if he is not a LPR or USC. Seems like a bit of an overreach by the US Treasury!

In addition to the above, even though he may abandon his GC you can still file joint US taxes for as long as you are married - MFJ - in which case you will need to declare his income in GB as well. In some cases it makes sense to do so and take advantage of the better tax bracket. It is something you may wish to explore.

Thanks, Gegel! So just to confirm, I will always need to list my spouse's SSN on my US tax returns so long as we are married and regardless of his GC status?

I had thought the MFJ option was only available to spouses who both have US citizenship and/or green cards/LPR status. Is this wrong? Is it possible to file jointly with the IRS even if my spouse is not a US resident and does not have US citizenship?

And a bigger can of worms: when is it advantageous to file jointly vs separately? Sorry, I know that's a difficult question! Thanks again.

Thanks, Caryh. What does this mean for my tax filings going forward? Will I always need to list my husband's SSN on my returns, even if he's no longer a green card holder and no longer obliged to file with the IRS?

Hi everyone,

Here's our situation: My husband got his green card in 2013 (I'm a USC), but we've continued to live in the UK since then and have decided to formally abandon his GC (form I-407) because we do not intend to live permanently in the US at this time. I understand that my husband needs to file tax returns as an alien resident for every year he's had his green card. So he'll do that for 2013 and 2014. But after that, if we are not living in the US and he no longer has his GC, it is my understanding that he no longer needs to file tax returns with the IRS.

With this in mind, I am concerned about what impact his GC abandonment will have on my own US tax returns. As a USC, I file taxes with the IRS every year and for the 2013 returns I'll file them as "married, filing separately." The tax return form (e.g. form 1040) asks for my husband's name and social security number. Fine. I plan to list that info on my returns. But after he abandons his green card (and sends his SSN card back to the Social Security Administration), what do I do in future years? Do I keep listing my husband's SSN even though he has abandoned his SSN and green card? Or, do I list his SSN as "n/a"? Would that be a red flag for the IRS? Very confused.

A million thanks for your advice.

Zeffe

Hi everyone,

Thanks in advance for any advice. Here's our situation: My husband got his green card in 2013 (I'm a USC), but we've continued to live in the UK since then and have decided to formally abandon his GC (form I-407) because we do not intend to live permanently in the US at this time. I understand that my husband needs to file tax returns as an alien resident for every year he's had his green card. So he'll do that for 2013 and 2014. But after that, if we are not living in the US and he no longer has his GC, it is my understanding that he no longer needs to file tax returns with the IRS.

With this in mind, I am concerned about what impact his GC abandonment will have on my own US tax returns. As a USC, I file taxes with the IRS every year and for the 2013 returns I'll file them as "married, filing separately." The tax return form (e.g. form 1040) asks for my husband's name and social security number. Fine. I plan to list that info on my returns. But after he abandons his green card (and sends his SSN card back to the Social Security Administration), what do I do in future years? Do I keep listing my husband's SSN even though he has abandoned his SSN and green card? Or, do I list his SSN as "n/a"? Would that be a red flag for the IRS? Very confused.

A million thanks for your advice.

Zeffe

Congrats!!!! Woohoo!!!! Hubby's is a week from today. Fingers crossed- think I may not be admitted into the Embassy either - sent a letter to the mailing address a week ago, but that's it. No big deal though, I'll bring a book!

Good luck next week!! I also figured it wasn't worth arguing over getting admitted into the Embassy. I was just happy the hubby got the interview letter!!

Congratulations. Curious if they allowed you to go in with him??

They did not, but we didn't push either. The staff member organizing the interview queue asked if we sent an email (we did and brought a printout) and asked if we received a response (we did not). So we didn't push it. I went for coffee and a walk and he went into the Embassy.

Thankyou!!!!

Although Im freaking out about what documents now.....NVC have all mine!! I just have my interview letter,passport pictures and passport.

I sooooooo cannot wait for this to be over!!!

The waiting is the absolutely worst part of this. Would DOS (at the 202 phhone number in DC) have info on whether your documents have been sent back?

Wonderful news!!!! :dance:

I have my CR1 interview next week,when he can could he write a review? I need some reassurance its not too horrific!!!!

Hope you're back together again soon

He's going to write the consulate review this weekend. But don't worry! He said the most stressful part was when the consular officer was asking for all the documents really quickly. His and my advice for this: clearly label all of your documents with little post-it notes and file alphabetically. That will make it easier to find the documents when asked for them.

Congratulations!

Thank you so much! 24 hours later, I am *still* feeling waves of relief!

Hi everyone,

Just wanted to share the great news: my husband was approved yesterday morning for a CR-1 visa!!! The relief I felt when I heard the news... there are no words!

Massive thanks to everyone on VJ for all the support throughout this stressful process. And very best wishes on your journeys! Ours will continue stateside soon, I hope

We sent a letter to the address on the interview letter we received. Not sure if this will suffice.

Best of luck!!

Best of luck on your upcoming interview too!

You have to call the line that charges you per minute and request they give you an email code to get an answer. However, you might not get a response in time for your name to be entered on the appointment list since its two days away. Sometime it takes a week to hear back.

You might try what I did with no prior permission---when we got to the front of the line outside, I handed my opened US passport to the man with the clipboard and said "I'm a US citizen. May I accompany my fiancé inside for his visa interview?". He said yes. If you dont get in, there is a coffee shop nearby or shops on Oxford Street. Go shop a couple of hours then celebrate the approval together and enjoy London together.

I'll flash my US passport and try the just-show-up approach. I'll also bring a copy of the email my husband sent requesting that I be added to the Embassy list on the day of his interview.

Fingers crossed all goes well! Will post an update here and in the Embassy reviews section after the dust settles. Right now, need to go make more photocopies ;-)