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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10934
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I am a Canadian/US citizen living in Canada. I married a Canadian

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I am a Canadian/US citizen living in Canada. I married a Canadian citizen last year and we live in Canada. My wife has never lived in the US and does not have a green card nor any other US paperwork. How do I handle the filing status question on the 1040 form?

NPVAdvisor :

Hi,

NPVAdvisor :

First, you do have a choice ...

NPVAdvisor :

To determine whether it is to your advantage to treat your spouse as a resident for tax purposes, you could calculate your taxes both ways before you file your return: married filing separately including only your income, and married filing jointly including both your worldwide incomes. If your spouse has considerable income outside the U.S., it may not be to your advantage to file jointly, even though the rates are lower.

NPVAdvisor :

To make the choice to treat your nonresident spouse as a resident for tax purposes, you attach a statement to the joint tax return you file. The statement must be signed by both spouses and must indicate that on the last day of the tax year, one spouse is a nonresident and the other is a U.S. citizen or resident and that you choose to be treated as residents for the entire year. And you must indicate your names, addresses, and identification numbers.

NPVAdvisor :

Now, when you file a joint return, you would need to request an individual taxpayer identification number (ITIN) for your nonresident spouse, unless your spouse has a social security number. You can apply for an ITIN by filing Form W-7.

NPVAdvisor :

You can send in the W-7 with the return, but you'll have to file by mail, of course

NPVAdvisor :

Make sense?

Customer:

Why does she have to file anything with the IRS when she does not live in the US and has no plans to and has no US income?

NPVAdvisor :

She doesn't have to

NPVAdvisor :

Again, you have two choices

NPVAdvisor :

(1) You file as married filing separately

NPVAdvisor :

(2) file jointly by attaching the W-7

NPVAdvisor :

The standard deduction is 12200 for filing jointly AND you both get a personal exemption

NPVAdvisor :

So, depending on your situation, there might be a tax benefit to filing separately

NPVAdvisor :

That's why I sad, run it bot ways above

NPVAdvisor :

sorry. meant to say ...a tax benefit to filing JOINTLY

Customer:

So that is if I pay US taxes but I am claiming the foreign earned income exclusion. On the 1040 form, how do I handle the request for spouse info and SSN?

NPVAdvisor :

But on the 1040 form you still have to choose a filing status

NPVAdvisor :

If you choose filing separately, just tup N/A in the bos for spouse, as she does not have one

NPVAdvisor :

"just PUT N/A in the box ..."

Customer:

That is exactly what we wanted to know. Thank you so much!

NPVAdvisor :

You must indicate that you are married, which means that you either file as married filing separately or jointly ... and the only way not to treat your spouse as a non-resident is to file married filing separately

NPVAdvisor :

Great

NPVAdvisor :

glad we got there

Customer:

Thanks for your time. Have a good day.

NPVAdvisor :

You as well!

NPVAdvisor :

If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.


HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question

Lane and other Tax Specialists are ready to help you

Thanks so much for the rating Jaco.

If you'd like to work with me, personally, again just say FOR LANE ONLY at the beginning of your next question.



Thanks again,
Lane