Married in a Foreign Country and U.S. Taxation
Question: I’m a US Citizen working abroad, for several years I have filed my W-2 and claimed the foreign income exclusion. I’m still working abroad and qualify for foreign income exclusion, as a US Citizen, but I married a Philippine Citizen in 2019. How does this marriage affect my US Tax returns for 2019?
Answer: You’re no longer single, so for 2019, you’ll have to use MFS or MFJ. This can get complicated really fast. But if you take a step back and take a deep breath, it usually isn’t as bad as it seems.
Your spouse will be considered as a non-resident Alien. That gives her several options. For tax purposes, she can be a true nonresident alien, or she can be a dual-status alien, or she can choose to be treated as a resident alien for the entire year. If I were you, I wouldn’t screw around with dual-status.
If your spouse has meaningful income in the Philippines, and no US income, and her foreign income has no connection to the US, then she could just stay off the radar, with no requirement to even file a return. That means you’ll have to file MFS.
If she has no significant income, and the long-term plan is for her to immigrate to the USA and become a permanent resident, then you should file a joint return, and she can make the election to be treated as a resident alien for tax purposes for the entire year. That wouldn’t stop you from claiming the foreign earned income exclusion.
To go the MFJ route, she will need to apply for an ITIN at the same time you file the joint tax return. The ITIN application for your spouse and the joint tax return, along with your spouse’s original or certified passport goes in the same package, and needs to be mailed to ITIN unit in Austin -TX.
If you choose the MFJ option, you can forget about electronic filing for this year. If you file MFJ, you’ll need to write in “applied for,” and file the tax return together with her Form W-7 (ITIN application)
If she chooses not to file a return, and you file MFS, you’ll need to leave the spouse’s SSN field blank, or write in “NRA.”.
For MFS return without your spouses ITIN or SSN, you can efile the return depending on the software being used for the tax preparation.
***Disclaimer: I am a tax accountant and a CPA licensed in Massachusetts , but I am not your accountant or advocate (Unless you have signed up to my services). This communication is not intended as tax advice, and no tax accountant -client relationship results**