Ask The Taxgirl: Nonresident Spouse

Taxpayer asks: I just got married to my beautiful wife who happens to be Australian. I’m a graduate student in San Diego and she hasn’t come to live with me yet. My wedding was on December 27th so I’m wondering if it is somehow illegal for me to file my taxes as unmarried. She has never made a cent in the US and she isn’t my dependent (I might be hers pretty soon, being a grad student and all). Are there any benefits for me to file as married? Thanks.

Taxgirl says:
First of all, congrats on the wedding!

Second, I’m going to preface my comments by saying that my answer is limited to the tax consequences as they relate to the US and not to Australia. While I do field questions from around the world (bring ’em on), my focus is really US tax law. And Lord knows, I don’t want to piss off the likes of Russell Crowe and his ilk by saying something misleading about Australian taxes… And don’t send me email about Crowe being from New Zealand, he might have been born there but he was raised in Australia, so there.

But back to the matter at hand: what to do when your spouse is not living in the US and you are.

First of all, some definitions:

Single. Seems easy enough. You can file as single if you were never legally married under the laws of the US (meaning, really, that same-sex couples who might be married abroad must still file as single in the US); you were legally separated or divorced according to the laws of your state (in states like Pennsylvania where there is no legal separation, this means your choices are only married or divorced) or you were widowed before the last tax year and did not remarry during the tax year.

Married Filing Jointly. Okay, this one is also pretty easy. While the marriage penalty used to affect your decision, there really isn’t one anymore so that most married couples will choose this option. You can file as MFJ if you were (obviously) married as of the last day of the tax year whether or not you’re living together or if your spouse died during the tax year and you did not remarry. Again, you must be legally married under the laws of the US (that doesn’t mean that you have to be married here, just that we have to recognize it) so same-sex marriages are not realized for purposes of MFJ.

Married Filing Separately. This is a less popular option nowadays following the changes to Code with respect to the marriage penalty. In fact, you are more likely to get a higher tax bill filing MFS because you lose some of the benefits granted to MFJ filers, including certain deductions and credits. The rules still for MFJ still apply – you just make the decision to file as MFS (for whatever reason).

Head of Household. Head of Household is a wildly misunderstood election. You can only file as HOH if you are unmarried (important!) and provide a home for a dependent. Keep reading, though, there are caveats. You must be single, divorced or otherwise unmarried at the end of the tax year and (1) you paid more than 50% to keep a home for the entire tax year for a parent who was a dependent OR (2) you paid more than 50% to keep a home for the entire tax year with your dependent (but check the rules for who qualifies as a dependent for divorced or separated parents, I’m not going to get into that).

All that said, you are considered unmarried for purposes of HOH even if you were not divorced or legally separated at the end of the tax year if all of the following apply:

  1. You lived apart from your spouse for the last 6 months of the tax year (don’t count temporary absences for business, medical care, school, or military service) AND
  2. You file a separate tax return from your spouse AND
  3. You paid over half the cost of keeping up your home for the tax year AND
  4. Your home was the main home of your child, stepchild, or foster child for more than half of the tax year AND
  5. You can or could claim (under the rules for children of divorced or separated parents) this child as your dependent.

Now that all of that is out of the way, let’s get back to your question: where do you fall in all of this? Generally, a husband and wife cannot file a joint return if either spouse is a nonresident alien at any time during the year. However, if at the end of the tax year, you are married and one spouse is a US citizen (you) or a resident alien and the other spouse is a nonresident alien (your wife in Australia), you can choose to treat the nonresident spouse as a US resident.

If you make this choice, it’s done: you’re both treated for income tax purposes as tax residents for the entire tax year. Neither of you can claim benefits under any tax treaty and you are both taxed on your worldwide income, which would include income received from sources in your wife’s work in Australia. This is not an irrevocable election: you can file MFJ this year and MFS in future years.

You actually make the election by attaching a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the name, address and Tax ID number (or SS number, if she has one) of you and your spouse and a statement that you’re electing to be treated as US tax residents for the entire tax year.

So, the verrrry long answer to your question is that you can file as MFJ or MFS. You cannot file as single, you know, since you’re not.

I would run the numbers and see what comes out if you make the election. Off the cuff, I’d say that if you have very little income, it’s probably advantageous in the US for you to file as MFJ (if she were not working, it would be a no-brainer). But then, it really does matter what kind of income your wife makes and what your expenses/deductions are – clearly if Australian tax rates are lower and your spouse is making tons of money, you wouldn’t want to subject her to US tax if you didn’t have to. On this one, I really would consult with a tax professional, preferably a good accountant.

One more word of wisdom, which probably doesn’t so much apply to you as it does to others in similar situations, if there are any immigration consequences to your tax filing, make sure that you consult with your immigration attorney. As you may or may not know, marriage to a US citizen does not equal US citizenship in all cases so if there is an immigration concern, check before you file.

Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.

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8 thoughts on “Ask The Taxgirl: Nonresident Spouse

  1. I came to US on L1 and is a non-resident. My wife and child are India. Can I file my Tax returns as married person or single. Please let me know

  2. My wife and I married in August 2009 in Quezon City, Philippines. She is in her final year of Nursing School there and will complete her BSN degree and RN certifications in June 2010. I financially support her there as well as pay all her University tuition. She being a citizen still of the Philippines, has no SS# or tax I.D.. I am a U.S. citizen and want to know can we file MFJ and can we deduct for her educational expenses as well? Thank you in advance for considering my question and also for this forum.

  3. Of course you left out the “best” part, if you file as HOH because you qualified under the considered unmarried rules, then what’s the filing status of the spouse…MFS (except if you qualify as S under state rules). This is certain to make life difficult for those that are in contact with their spouse. Oh the joys of the tax code!

  4. First of all, you are either married or you are not. If you are married, you can not be single, or HOH. However, in order to file married return, including married filing joint, mfs, married with non-resident spouse…etc., it requires a little leg work and few extra forms to file. The question is…. Are you willing to pay the extra preparation charges to your accountant to file your taxes correctly? Unfortunately, we all know the answer to that question.

  5. Paul, you can be married and still claim HOH if you are “considered unmarried” – but rules on those are tricky and I think warrants a tax pro to help out.

  6. Hi,
    My wife and I are filing jointly. I am a US citizen and my wife is a non-resident. When completing Schedule M, I only include myself, right?

  7. GI–BINGO!! Thanks for the reference, this is the exact information I’ve been looking to find! Thanks!

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