MFJ->MFS

bmx · Post by **bmx** » Sun Apr 13, 2008 2:45 pm

I work in US with US income only and spouse works in Canada with income from Canada only. With the help of nelsona and other folks, I completed my filing as MFJ last year (with 2555 exclusion). I thought to file the same way as MFJ this year but found out by running the software that tax would be much higher as compared to the case if we would file as MFS (3.5k vs 2k). So my question is

(1) am I allowed to change my filing status from MFJ to MFS.
(2) if yes, is it OK that my spouse doesn't file Federal and State returns at all this year because all her income is from Canadian source?
(especially I have some concern with state return as there is no treaty to play with and all income is taxable unless one can claim as no resident or part-resident)

Thanks!

nelsona · Post by **nelsona** » Mon Apr 14, 2008 4:12 am

Rules have changed with 2555 to make it less valuable.

You can file MFS. And, you can, since she has no US income, still use her as an exemption.

She should not have to file in your state.

bmx · Post by **bmx** » Tue Apr 15, 2008 1:30 am

Thank you for your suggestions.
For my case, it seems that filing as MFS with exemption for spouse gives even better result. So filing in this way is my choice for this year. However, I was surprised to be told by turbotax that my Federal return couldn't be e-filed because of the exemption.