Foreign wife

If you live in the U.S., she needs to get an SSN. See

This is an issue I deal with regularly and the answer is not simple. There are a number of factors involved in filing a joint return with a nonresident alien spouse and the need to be considered carefully.

By filing a joint return, both of you are making an election for the spouse to be treated as a resident for the entire tax year! This means that all world-wide income must be included on the US return and US taxes paid accordingly. If the spouse has no incme, this is not a problem but can add to the US tax burden if there is income.

If you situation involves more that a simple salary, I strongly suggest that you seek help from a professional who is familiar with the rules for nonresident alien taxpayers.

Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

Thanks for your response. She does have foreign income but wouldn't the tax burden be reduced by the "Foreign Tax Credit?

Not necessarily. The Foreign Tax Credit is limited to either the tax payable to the contracting state with the effectively connected income or the tax payable to the other contracting state. What that means is that by adding her income to your income for a MFJ return, you may end up with more taxes payable to the USA. In which case, why bother adding. She isn't obligated as a non-resident alien to add her world- wide income to your tax return and allow it to be taxed by a country which she has no ties other than her husband is a citizen of that country.

It would be a lot easier to give you good answers if you'd provide one critical bit of info: where do you live? If you and wife live in the US, you both owe US tax. If she doesn't live in the US, she doesn't owe US tax, with various complications as mentioned in prior messages.

Currently she is visiting me. It will be until the beginning of next year when she leaves her job in UK and joins me here in the America. I understand that I will need to file a W7 and check option e for her TIN. Thanks

If she does not fall into the residence definition... that is, she is only a visitor for tax purposes, she will have no obligation to file a US tax return. Again, why does she need to file?

It has more to do about me filing Married Filing Joint than she filing taxes here in the US. I just don't want her to get taxed twice because by filing MFJ I might have to include her income but I am hoping the Foreign Inc Tax credit will zero it out.... but from what you are saying I might not even have to include her income and yet claim MFJ in my return? All I am trying to do is to reduce my tax liability. Thanks for all your help.

Get Turbo Tax or TaxCut and run both scenarios.

If she has income, from any source, you must include it on a joint return. However, if she has a salary, etc., the foreign exclusion may be available, in addition to the foreign tax credit.

The foreign tax credit is allowed in the same ratio as taxable foreign source income to tota ltaxable income. If the non-foreign source income is high enough, the allowable credit could be less than the foreign tax paid.

Either way, including your spouse on a joint return adds considerable complication to the return. Unless you are looking at a significant reduction in tax liability, it may not be worth the additional work.

Using TurboTax or such to work through the alternatives is possible but you need to be sure you are actually considering all the choices. If there is enough money involved to make this whole exercise worthwhile, you should probably consult a professional who is familiar with the expat rules. Just any professional is not enough! Over the years, I have seen many expat returns prepared by professionals who are not familiar that contain significant mistakes.

Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

Like Lanny says, it may not be worthwhile to add her to your tax return and file MFJ. The majority of times when I am doing US Citizen with spouse who is a Non-Resident Alien, it is generally better to file as MFS. Even with the Foreign Income Exclusion and with Foreign Tax Credits.

Why? Because, even though a number of times you may get the NRA spouse paying 22%, the treaty limits the credit to 15%. So you don't get to make use of the Foreign Tax Credits you were hoping for.

Yes, your tax liability will go down. Her liability will go up. Between the two of you, you are paying more than if you file MFS.

This is definitely a case were someone who knows the rules will save you money and time.

OK. Thanks for all your responses. I think this clears up a number of things for me.