help with filing taxes jointly (she's still in China)

[Randy W]

Now I'm confusing the first year choice with the choice to treat a non-resident spouse as a resident for tax purposes. To make the first year choice, she must have been a US resident for part of the tax year. Scratch that (as I understand your situation).

 

The question you need to answer is, "Does she have any income for the tax year that is reportable to the IRS?" That is, do you wish to declare her income on your tax return? No, don't answer that here (unless you want to).

 

But if the answer is "Yes", then you MAY wish to treat your non-resident spouse as a US resident for tax purposes. Not likely to be to your benefit.

 

But if you were married on Dec 31, you may file Married (either jointly or separately) provided she has an SSN or ITIN, or can get one by Oct 15 (the deadline with extensions). If not, well - you have 3 years from this April 15 to file an amended return AFTER she gets one.

[Beachey]

Randy, what you say makes sense. I guess my question comes down to this,

 

Is it permissable to file Married Filing Jointly while not agreeing to your non resident alien spouse being treated as a resident for tax purposes? If you do not agree, then the IRS can not tax the non-resident spouse's income.

 

Logic would seem to say that the answer is no since married filing jointly while not declaring one spouse's income is taking the benefit without the liability. The IRS pub does not really address this.

 

If you can legally, I would be interested in knowing that. My guess is the only way to exclude your spouse's income is to file Married Filing Seperately.

 

 

[Randy W]

Randy, what you say makes sense. I guess my question comes down to this,

 

Is it permissable to file Married Filing Jointly while not agreeing to your non resident alien spouse being treated as a resident for tax purposes? If you do not agree, then the IRS can not tax the non-resident spouse's income.

 

Logic would seem to say that the answer is no since married filing jointly while not declaring one spouse's income is taking the benefit without the liability. The IRS pub does not really address this.

 

If you can legally, I would be interested in knowing that. My guess is the only way to exclude your spouse's income is to file Married Filing Seperately.

 

 

 

 

 

But the instructions for Form 2555 say that a married couple can BOTH file a form 2555, listing their separate foreign earned incomes for exclusion. Again, not addressing your situation exactly, but I would interpret this as indicating that if only ONE does, that person would include their own form 2555 with your tax return

 

I think I'm starting to conclude that you SHOULD agree to treating her as a resident - I think this simply means that she will fall under the US tax laws, which allow her foreign income to be excluded. This whole thing seems very vague and unclear as to what you accomplish either way.

 

Bottom line in my view - you are married (as of last year) - so you CAN file married filing jointly. Foreign income up to $91,500 CAN be excluded from your income tax, since she satisfies ALL tests on Form 2555. I think these two are the basic facts behind your situation, regardless of how complex the Publication gets.

 

You CAN declare your wife as a resident for tax purposes, which allows you to DECLARE her income (on Form 2555) and EXCLUDE it

 

I really think that's your situation in a nutshell - don't let all the other situations confuse the issues. Simply put - she IS your wife. Foreign income CAN BE excluded.

 

I can't back up my claim that SHE can take the Foreign Income Exclusion while YOU don't qualify for it, but if it were ME, I think I would go ahead and file that way with only ONE Form 2555. I'll bet that will work for you.

[Randy W]

My interpretation of "non-resident alien" would then be someone who falls outside of the jurisdiction of the US tax laws, with nothing needed to be reported. So possibly by filing jointly with your spouse you bring them under the "resident alien for tax purposes" umbrella (that is, falling under the US tax regulations). That would seem to make sense.

[Randy W]

Another little gem, although I don't know where I had found this

Here is something most expats seem to forget or not know:

A common misconception that contributes to the international tax gap is that this potentially excludable foreign earned income is exempt income not reportable on a US tax return. In fact, only a qualifying individual with qualifying income may elect to exclude foreign earned income and this exclusion applies only if a tax return is filed and the income is reported.

 

Q: I already report my income to my foreign country of residence. The Foreign Earned Income Exclusion eliminates that income for U.S. tax purposes. So why should I report to IRS?

 

A: Because if you don't report your earnings - even though they are 100% excluded - the IRS can later deny you the exclusion and tax you on that income (even though the foreign country already taxed the income).

Edited March 27, 2011 by Randy W (see edit history)

[Beachey]

Randy - Thanks for your help. I agree that I can just ask that my wife be treated as a resident alien and that is simplest solution.

[david_dawei]

Original Post: You need to submit a notarized copy of her passport with the W-7, for an ITIN. Consulate: $50

 

 

I have a notarized copy of her passport, but it's a Notarial Certificate from the Notary Public Office in her city (Yingkou, Liaoning) -- did I read somewhere that the IRS would only accept a passport notarized in the US or at the US consulate?

 

 

 

I just got off the phone with my wife. those bastards in Guangzhou Consulate told her they will not Notarize her passport. She'll have to take it elsewhere, get a notarized copy, then they'll certify the notarized copy of her passport. WTF???

 

 

I just took my wife's passport to Shenyang. They would not notarize since she was not there. They did issue me the certificate that says I swear this is a copy of my wife's passport. Consular Officer made me raise my right hand and everything. I told them I needed it for the TIN for my wife for my (err...our) US taxes, they said it would work.

 

It makes sense the US consulate would not want to validate a Chinese passport as valid but how do they know the notarized copy is valid?

Sorry about that guys... I should of said a 'certified copy' from the Consulate. That is what they are giving you.

[david_dawei]

For those who have (or will) get a refund check which will have your spouses name on the check, but she is in China; how do you plan to deposit it (ie: she is not on the bank account and not in the US anyways)?

 

I heard if you file for the ITIN at same time, they send the refund back as a check (not direct deposit).

[Randy W]

When you include her income you can file the 2555 form and exclude her foreign income, this is a one time exclusion. I first filed Married Filing Seperately because my wife did not have a SSN# and after we got her SSN# I amended to Married Filing Jointly and used the 2555 to exclude her income.

 

 

 

This form is used to report ANY foreign earned income, for either you or your spouse. I don't see any one time limitation.

[chilton747]

For those who have (or will) get a refund check which will have your spouses name on the check, but she is in China; how do you plan to deposit it (ie: she is not on the bank account and not in the US anyways)?

 

I heard if you file for the ITIN at same time, they send the refund back as a check (not direct deposit).

 

 

 

Here is what I found on the IRS website: http://www.irs.gov/newsroom/article/0,,id=105957,00.html

 

A word of caution: Some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your Direct Deposit will be accepted.

[david_dawei]

Here is what I decided to do.

1. I put together a letter like Whatsthedeal showed; very nice ! It has the required comments of election and her info, including her income for 2010. We will both sign it. This will be used in support of filing form 2555 (Foreign Earned Income Exclusion).

2. I will file form 2848 (Power of Attorney and Declaration of Representative) as tsap seui did (damn... he is good for something). I will use that so I can sign her name on the tax return. By association, I will use that to sign her name on any tax check, should I need do it. There is a place on that form which allows the person to request their power of attorney NOT to have the ability to cash a check; ergo, left unchecked means they can cash the check. That's what I'll argue should it come to it.

 

Thanks charles for helping me to get to this point

Edited March 29, 2011 by david_dawei (see edit history)

[tsap seui]

Here is what I decided to do.

1. I put together a letter like Whatsthedeal showed; very nice ! It has the required comments of election and her info, including her income for 2010. We will both sign it. This will be used in support of filing form 2555 (Foreign Earned Income Exclusion).

2. I will file form 2848 (Power of Attorney and Declaration of Representative) as tsap seui did (damn... he is good for something). I will use that so I can sign her name on the tax return. By association, I will use that to sign her name on any tax check, should I need do it. There is a place on that form which allows the person to request their power of attorney NOT to have the ability to cash a check; ergo, left unchecked means they can cash the check. That's what I'll argue should it come to it.

 

Thanks charles for helping me to get to this point

 

 

 

Go gettum David.

 

I leave in a few minutes to get my amended tax transcripts for 2008, 2009 (our marriage year) and 2010.

 

All the financial pieces of the puzzle are now together once I get those transcripts. The wife is on my tax forms since 2009 and she has her ITIN number.

 

It took me a few months but the fruit of my labors will be finished finally with these transcripts.

 

tsap seui

[whatsthedeal]

Here is what I decided to do.

1. I put together a letter like Whatsthedeal showed; very nice ! It has the required comments of election and her info, including her income for 2010. We will both sign it. This will be used in support of filing form 2555 (Foreign Earned Income Exclusion).

2. I will file form 2848 (Power of Attorney and Declaration of Representative) as tsap seui did (damn... he is good for something). I will use that so I can sign her name on the tax return. By association, I will use that to sign her name on any tax check, should I need do it. There is a place on that form which allows the person to request their power of attorney NOT to have the ability to cash a check; ergo, left unchecked means they can cash the check. That's what I'll argue should it come to it.

 

Thanks charles for helping me to get to this point

 

 

Wish I had thought of that. It would of saved us lots of mailing back and forth and what not. Here is a link to form 2848 only to complement David's post.

http://www.irs.gov/pub/irs-pdf/f2848.pdf

 

Good info here someone should to make a guide.

[Randy W]

Here is what I decided to do.

1. I put together a letter like Whatsthedeal showed; very nice ! It has the required comments of election and her info, including her income for 2010. We will both sign it. This will be used in support of filing form 2555 (Foreign Earned Income Exclusion).

2. I will file form 2848 (Power of Attorney and Declaration of Representative) as tsap seui did (damn... he is good for something). I will use that so I can sign her name on the tax return. By association, I will use that to sign her name on any tax check, should I need do it. There is a place on that form which allows the person to request their power of attorney NOT to have the ability to cash a check; ergo, left unchecked means they can cash the check. That's what I'll argue should it come to it.

 

Thanks charles for helping me to get to this point

 

 

Wish I had thought of that. It would of saved us lots of mailing back and forth and what not. Here is a link to form 2848 only to complement David's post.

http://www.irs.gov/p...s-pdf/f2848.pdf

 

Good info here someone should to make a guide.

 

 

But the Form 2848 says at the top, "Form 2848 will not be honored for any purpose other than representation before the IRS"

 

You may need another POA to be able to cash the check. Work with your bank here to see what they need.

 

Item 6 of Form 2648 says, "If you want to authorize a representative named on Iine 2 to receive, BUT NOT TO ENDORSE OR CASH, refund checks, initial here" - that means you can authorize them to RECEIVE your checks (the IRS will mail it to them), but this form will not allow them to CASH it. Form 2648 IS NOT CONCERNED WITH CASHING THE CHECK - that's an outside matter.

[david_dawei]

But the Form 2848 says at the top, "Form 2848 will not be honored for any purpose other than representation before the IRS"

 

You may need another POA to be able to cash the check. Work with your bank here to see what they need.

 

Item 6 of Form 2648 says, "If you want to authorize a representative named on Iine 2 to receive, BUT NOT TO ENDORSE OR CASH, refund checks, initial here" - that means you can authorize them to RECEIVE your checks (the IRS will mail it to them), but this form will not allow them to CASH it. Form 2648 IS NOT CONCERNED WITH CASHING THE CHECK - that's an outside matter.

 

Yes, I know... I'm hoping the bank sees the catch-22; authorized to file taxes for someone not in this country and then issuing a check to that person who is not even on a bank account, etc. That's why I said I would "argue" it if it comes to it. This is my initial plan. If the bank would refuse to let me put her name on the account and refuse to cash it, I'll tell them that they need to tell me how to cash a check the government Ok'ed to file and draw. I can at least show the bank proof of why I even have a check with her name on it, etc.