By Bethany Bouw
In the flush of love and planning a wedding, perhaps the last thing on your mind was how the marriage might impact your income tax filings going forward. You were probably so busy planning how to deal with the immigration paperwork so you could simply reside in the same nation, that you may have not given your tax situation much thought. We at Ryan & Wetmore are here to help with some filing tips to get you started in the right direction. These eight tips will help clear things up for you, so you can get back to focusing on your new spouse instead of your new tax status!
- As a US person, your worldwide income is taxable. So, if you live abroad with your non-resident, non-citizen spouse, you still have to report your worldwide income on your annual income filing.
- If your nonresident, non-citizen spouse moves to the US, they may not immediately be a resident for tax purposes. You can make an election under Section 6013(G) to treat your non-resident, non-citizen spouse as a US resident for tax purposes. This can also be handy if you want to file jointly while you and your non-resident and non-citizen spouse live abroad.
- The Section 6013(G) election is a one time only election. It can only be made once. If your spouse predeceases you and you remarry another nonresident noncitizen, you cannot make the election again. The same rule applies in cases of divorce.
- The election requires the signatures of both spouses. The non-resident, non-citizen spouse must also obtain a social security number or an individual taxpayer id number (ITIN).
- It is important to note that ITINs can expire due to lack of use and there are also rolling expirations occurring. You should contact your tax professional to determine if the ITIN needs to be renewed.
- You must file jointly with your spouse for the year of the election. After that initial year, you can file as ‘married filing separate’ if you so choose. Both you and your spouse must report worldwide income each year.
- Treating your non-resident, non-citizen spouse as a US resident means that their worldwide income must be reported. The same goes for informational filings such as the FBAR. It is important to not forget about their income and assets.
- Even if you do not make the election, you will still need to examine your filing status as a married individual.
- Most importantly, keep your qualified tax professional in the loop as you move towards the wedding and after. They will help you make the most appropriate choices for your filing status as it pertains to your residence, income, and assets. This is not something to ignore and hope it works itself out. It is vital to smooth out the tax filing process in your first few years of marriage. An ounce of prevention beats a pound of cure. You really do not want to have to do the clean up of your tax situation that is involved in that “pound of cure” from lack of proactive tax planning.
Ryan & Wetmore has assisted many clients with their filing status, ITIN applications, and foreign income/asset reporting over the years. We would be happy to assist you if you have concerns about your upcoming and/or current tax situation and are happy to work with you on your tax planning.
The International Tax Team at Ryan & Wetmore is well-versed in foreign informational filings. For questions or concerns regarding your international accounts and assets, click here to email our foreign tax team. Please be aware that tax issues are complicated and may vary based on the details of your situation. For this reason, an initial phone call is generally required to obtain the facts and address the questions.
Bethany Bouw CPA, is a manager at Ryan & Wetmore and has been with the firm for over eight years. She has experience with offshore voluntary compliance and assisting taxpayers with foreign asset and entity reporting requirements.
Traci Getz CPA, is a partner with Ryan & Wetmore, P.C. Traci has over fifteen years of experience providing accounting, tax, and consulting services to small and medium-sized business owners. She works with clients to understand their accounting and tax issues while specializing in international tax, healthcare, and construction.
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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