Hi there,
I am trying to file a joint return with my wife who was a U.S. non-resident for part of 2016. I was a U.S. resident for the full year. I would like to treat her as a U.S. resident for the full year to simplify our return.
My understanding is I attach a signed statement to my return stating that we both intend to file as residents for the entire tax year.
My questions:
1. How do I report her income? Do I file this as foreign earned income?
2. Do I also file her income as regular business income (but she has no 1099 etc.)?
3. How do I deduct her business expenses?
She was unemployed while in the U.S. but was self-employed for the first part of the year while in Canada. She has a small gross profit after deducting expenses.
Thank you!
Filing joint return with non-resident alien spouse
Moderator: Mark T Serbinski CA CPA
[quote="panek"]I should clarify that my wife actually was a resident alien in 2016 so it's not clear whether the declaration is necessary (it seems that only applies to non-resident spouses).[/quote]
Nevermind, it seems that the same applies to dual-status aliens married to residents/citizens so I will need to declare.
Nevermind, it seems that the same applies to dual-status aliens married to residents/citizens so I will need to declare.
Re: Filing joint return with non-resident alien spouse
[quote="panek"]Hi there,
I am trying to file a joint return with my wife who was a U.S. non-resident for part of 2016. I was a U.S. resident for the full year. I would like to treat her as a U.S. resident for the full year to simplify our return.
My understanding is I attach a signed statement to my return stating that we both intend to file as residents for the entire tax year.
My questions:
1. How do I report her income? Do I file this as foreign earned income?
2. Do I also file her income as regular business income (but she has no 1099 etc.)?
3. How do I deduct her business expenses?
She was unemployed while in the U.S. but was self-employed for the first part of the year while in Canada. She has a small gross profit after deducting expenses.
Thank you![/quote]
And is she eligible for foreign earned income exclusion?
I am trying to file a joint return with my wife who was a U.S. non-resident for part of 2016. I was a U.S. resident for the full year. I would like to treat her as a U.S. resident for the full year to simplify our return.
My understanding is I attach a signed statement to my return stating that we both intend to file as residents for the entire tax year.
My questions:
1. How do I report her income? Do I file this as foreign earned income?
2. Do I also file her income as regular business income (but she has no 1099 etc.)?
3. How do I deduct her business expenses?
She was unemployed while in the U.S. but was self-employed for the first part of the year while in Canada. She has a small gross profit after deducting expenses.
Thank you![/quote]
And is she eligible for foreign earned income exclusion?
She reports the income as the agent said (but didn't give you full information, of course). You asked about using foreign earned income exclusion. It is foreign earned income that can be excluded, by using 2555.
It still first has to be reported as income.
It still first has to be reported as income.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
There will not be any delays due to this. Your spouse is a Cdn citizen/resident, and, as such she is always allowed to file a 1040. So joining you on your 1040 is allowed.
If there are delays it will be due to (a) not having her ITIN or (b) waiting until April to file.
If there are delays it will be due to (a) not having her ITIN or (b) waiting until April to file.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Since we are filing as if she were a full-time U.S. resident does it look suspicious that her business is listed in Canada? I will not be filing for the foreign income exclusion so the IRS may wonder if she worked in the U.S. while she was not legally able to work in the U.S. The foreign earned income seems too complicated and she spent more time in the U.S. than in Canada so I cannot figure out how she is eligible.
Doesn't matter.
She can exclude the portion of earned income that occurred while she was resident of Canada, up until the period she moved to US.
I think you may be getting hung up on what the IRS telephlunkie said to you. She reports business income on schedule C as if she was a US resident, not as if she had earned the income in the US. Big difference. US residents can arne business income anywhere in the world. It is still reported on Sched C. and if it can be excluded by either test for form 2555 that use the exclusion.
She can exclude the portion of earned income that occurred while she was resident of Canada, up until the period she moved to US.
I think you may be getting hung up on what the IRS telephlunkie said to you. She reports business income on schedule C as if she was a US resident, not as if she had earned the income in the US. Big difference. US residents can arne business income anywhere in the world. It is still reported on Sched C. and if it can be excluded by either test for form 2555 that use the exclusion.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing