Married to foreigner (Nonresident alien), IRS question

[Frank12]

Hi

I am an American citizen who recently moved to England. My wife is a British citizen. She is a Nonresident alien (NRI) when it comes to IRS, meaning she doesn't have any US tax liabilities.

We just got married. Meaning next year, I will be filling married filling separately ( MFS) with IRS. I have heard the electronic tax software will ask me for her social security number/ITIN which she doesn't have. I also have heard that I can write 999-99-9999 as her soc number then print the papers, then cross the above number, and instead write "NRI". Is this correct?
Is there a software which will let me submit electronically?

What are the pros and cons of obtaining ITIN for her?
We are planning on living in England for the foreseeable future. We also want to keep our finances as separate as possible. I also want to keep my US citizenship.

Thanks

 

[MichaelB]

Hi

I am an American citizen who recently moved to England. My wife is a British citizen. She is a Nonresident alien (NRI) when it comes to IRS, meaning she doesn't have any US tax liabilities.

We just got married. Meaning next year, I will be filling married filling separately ( MFS) with IRS. I have heard the electronic tax software will ask me for her social security number/ITIN which she doesn't have. I also have heard that I can write 999-99-9999 as her soc number then print the papers, then cross the above number, and instead write "NRI". Is this correct?
Is there a software which will let me submit electronically?

What are the pros and cons of obtaining ITIN for her?
We are planning on living in England for the foreseeable future. We also want to keep our finances as separate as possible. I also want to keep my US citizenship.

Thanks

There are a few expats here living abroad with US tax liability. Hopefully they’ll be along shortly to correct me.

IIRC not all tax sw is available overseas. In addition, not all tax sw supports the FEIE or the foreign tax credits form 1116. Turbotax does both, HR Block does just the FEIE.

The advantage of getting your spouse a ITIN is, if she has no US income, you can claim an exemption for her. There’s no real downside to getting the ITIN for her, aside from a bit of paperwork.

 

[Act2]

Just asking, I do not know: will she some day have spousal benefits from your Social Security and if so will having a TIN help smooth the way?

 

[Frank12]

Thank you guys for your response. My wife will not have US source income, but she will have UK income.
If I file married filling separately (MFS), can I still claim her as exemption on my US taxes? Won't the IRS start asking about her UK income,etc?

I have not looked into social security survivor benefits yet. But I plan to look the info up in the near future. Should I be looking at that information sooner? We are both relatively young and healthy.

 

[Frank12]

My main concern about obtaining ITIN for her is not the paperwork. I worry that it might cause headaches for her in the future, such as reporting her British income to IRS every year, rtc. I don't know if my concerns are valid or not. I hope others who have gone through this process will share their thoughts as well.

 

[MichaelB]

Thank you guys for your response. My wife will not have US source income, but she will have UK income.
If I file married filling separately (MFS), can I still claim her as exemption on my US taxes? Won't the IRS start asking about her UK income,etc?

I have not looked into social security survivor benefits yet. But I plan to look the info up in the near future. Should I be looking at that information sooner? We are both relatively young and healthy.

My main concern about obtaining ITIN for her is not the paperwork. I worry that it might cause headaches for her in the future, such as reporting her British income to IRS every year, rtc. I don't know if my concerns are valid or not. I hope others who have gone through this process will share their thoughts as well.

Yes, you can file separately and claim her as a dependent. She only needs to meet 2 requirements; no US sourced income and is not a dependent of someone else for US tax purpose.

Getting her an ITIN will not lead to her non-US sourced income being subject to US taxes, as long as you continue to file separate. What you cannot do, however, is switch back and forth between filing separate and filing joint, depending on if she had income that tax year. As long as you file separate and her income is not US sourced her earnings will not be subject to US taxes. If you do file joint, from that year on all her income would be subject to taxes.