Head of Household and AMT (alternative minimum tax)

[looking4advice]

Has anyone had experience in filing a 1040 as Head of Household? I am dual and my wife is Canadian only. We have 2 dual citizen children. The reason I ask is 3 tax preparers have given us 2 different answers.

Also, has anyone been hit with the AMT (Alternative Minimum Tax) while doing a 1040? My income was just about $115,000 and one preparer said no deductions could be used to offset the AMT of $4700 (ouch!) even though I paid a ton of tax in Canada.

[looking4advice]

Anyone have a comment on my question?

[nelsona]

Unless you lived apart from your wife for six months you cannot file HoH.

You haven't said how you are filing in US in terms of reporting income. Are you using 2555 to exclude wages or are you using 1116s for all your income.

If it is determined that you owe AMT on foreign income, a 1116-AMT should have been kicked out that would allow you to claim the Cdn tax on the income that resulted in AMT.

[looking4advice]

Thank you for the reply.

I have lived in Canada since 1966 and both a local CPA and the IRS confirmed I CAN file as HOH since my wife is a non-resident alien and I have 2 US citizen children in full time school and little income. But others have said I can't file HOH.

Here is the line from the irs web site (doc # 96729) which deals with the spousal separation issue:
"If your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien, then you are treated as unmarried for head of household purposes."

I will look at the 1116-AMT, thank you. I was filing MFS and that created the AMT liability. My income was right around $117,000.

[nelsona]

You are correct on HoH. uI have vealt with this in the past, and simply forgot.

Be sure to file such that you get the full child tax credit (if your children are young enough). That may mean filing jointly.