1040 Filing Status Strategy for US Citizen married in Canada

seanus · Post by **seanus** » Fri Mar 02, 2012 7:21 pm

Should we file our 1040s as "Married filing jointly" or "Married filing separately"?

My wife is an American and has been living in Canada for the last few years. I am Canadian. We've come to realize she should have been filing her 1040s and 1116es. Her income is small and there won't be any taxes due. She has never had accounts with >10K so doesn't need to file FBARs.

I'm working through the 1040 form and it's asking for Filing Status. "Married filing separately" looks the simplest because I imagine we can just put her/the American's income and taxes and not worry about the Canadian side. Doing the joint filing would take alot more work because my taxes are more complicated. However I've seen nelsona suggest Married filing jointly might be beneficial.

Also, we are going to move to the US this year.... so I'm wondering if we did file these returns with "Married filing jointly" if there would be foreign tax credits that would accumulate from the joint returns that we could then benefit from when we get to do our 2012 return next year.

nelsona · Post by **nelsona** » Fri Mar 02, 2012 9:45 pm

The key is: " there won't be any taxes due". There is your answer.
No need to complicate matter if no taxes are due.

Now, there is the matter of the child tax credit, which is free $1000 per US child that you have.

So, if your wife on her own does not qualify for this (she might), then you have to weigh if it worth the extra expense (you should have your taxes odne professionallly once) to get the extra grand(s).