Filing with a Nonresident Spouse: Insights for US Expats
In this week's Real Tax Questions From Real Expats, we're exploring whether a US citizen living abroad should file jointly with a nonresident spouse.
The Scenario
A US citizen, residing outside the US and married to a non-US citizen and non-resident, wonders about the feasibility of filing jointly in the US.
US Filing Statuses: General Rules
The filing statuses available are Single, Married Filing Jointly (MFJ), Married Filing Separately (MFS), Head of Household, and Surviving Spouse. This query primarily involves the first three.
Can You File Jointly with a Nonresident Spouse?
Generally, under Sec. 6013(a)(1), you cannot file jointly if either spouse is a nonresident at any time during the year. So, typically, our taxpayer should file as MFS. However, exceptions under Sections 6013(g) and (h) allow electing to treat a nonresident spouse as a resident for tax purposes, enabling joint filing.
The Catch and Its Implications
Electing this status means the nonresident spouse must report worldwide income and comply with FBAR and FATCA requirements. In our scenario, the spouse has no other income, making joint filing advantageous.
Making the Joint Filing Election
To file jointly:
- The nonresident spouse must obtain an ITIN (via Form SS4) with the initial joint tax return.
- The 6013(g) election, once made, remains effective until formally revoked and cannot be reinstated once revoked.
Conclusion
Joint filing with a nonresident spouse can be tax-efficient but requires a thorough understanding of the implications. Professional guidance is crucial for making informed decisions.