Thai Spouse and U.S. Tax

[Wandr]

What do people normally do about Thai spouses when filing U.S. taxes?

Online software is asking for a TIN (tax identification number). Is it necessary to get one, or is there an easier go-around for this situation?

Thanks.

[tonray]

If you are filing jointly she will need a TIN. If you are claiming her as a dependent, she will need a TIN. Same for Americans in Thailand...if I want to do anything with a tax return here...I need an ID #.

[lopburi3]

As said an ITIN is required to jointly file and believe application is submitted at time for tax return filing now (they do not issue independently as previously done).  Remember if joint file all her income must also be declared - not an issue for housewife but could be for some people.  You need to google process and do as it says.  

Edit:  as for online you might have to print out and file by mail first year until ITIN is received - believe as process she also has to sign a statement to allow tax of her income by USA.

Edited March 4, 2021 by lopburi3

[ubonjoe]

Info for the ITIN application and instructions is here on the IRS website.

https://www.irs.gov/forms-pubs/about-form-w-7

[Wandr]

Thanks everyone...

No, not filing jointly and not claiming anyone as a dependent.  Any solution?

A long shot - marriage is not registered in US. Can I claim single status?

A rant about US tax laws would be appropriate here, but I think it's been done!

[Wandr]

26 minutes ago, ubonjoe said:

Info for the ITIN application and instructions is here on the IRS website.

https://www.irs.gov/forms-pubs/about-form-w-7

Useful...thanks. 

Looks like she isn't even eligible for a TIN because I am not filing jointly, and not claiming any tax benefit. 

But I will still have to mail in the return because the software won't let me without the TIN.

[ubonjoe]

2 minutes ago, Wandr said:

Looks like she isn't even eligible for a TIN because I am not filing jointly, and not claiming any tax benefit. 

But I will still have to mail in the return because the software won't let me without the TIN.

You could file as single. You do not have to file as married unless you are doing a joint return.

My reported income is less than what is needed to file a return. To get my stimulus payment last year I did a non filers return as single so that it went into my bank account. Got my $600 payment on the 4th of January due to that filing.

[lopburi3]

43 minutes ago, ubonjoe said:

You could file as single.

He could be it seems to be illegal (although probably would not be acted on).

 

Quote

 

What happens if I file single but im married?

In short, you can't. The only way to avoid it would be to file as single, but if you're married, you can't do that.

 

HR Bloock source above - many others with same type of information.

[ubonjoe]

1 hour ago, lopburi3 said:

HR Bloock source above - many others with same type of information.

I am not sure about that. I wonder if really applies if a spouse is not a US citizen or resident and does not have a US earned income or a SSN/ITIN.

[Wandr]

If I am reading the tax law correctly,  the US will not give her a TIN if I don't file jointly and don't claim any tax benefit because of her.

Taking it a step farther,  I  assume they don't want to mess with her - no income reporting required. 

For me, it will be the same as filing single. 

But claiming Single status when married doesn't appear to be the right thing to do.  I guess I will have to complete the return online and then print and mail it.  That will be the only inconvenience. 

That is doable. Having to get a TIN for her and then persuading her to sit through US taxes would have been a nightmare!

[Etaoin Shrdlu]

1 hour ago, andy said:

Be aware that getting her an ITIN will result in her being put on US tax radar for life and this includes any bank accounts or other assets that may trigger FACTA/FBAR.  You probably want to pass on that unless you REALLY need that extra deduction.  You also may want to consider the potential advantages of having a spouse who is not subject to US taxes...but I won't go into further detail about that ????

I don't think the election to have a non-resident alien spouse file jointly triggers FBAR requirements for the non-resident alien's financial accounts. I recall looking into this many years ago and came to the same conclusion as described in this article: 

 

https://us-tax.org/2018/10/17/married-to-a-non-us-spouse-filing-your-fbar-and-form-8938/

 

Filing jointly does seem to trigger the need to file 8938 however the thresholds for filing for those living abroad and meeting the presence or resident test are fairly high, so check to see if this is necessary.  Also, Citibank's branch here in Thailand is not considered a foreign financial institution, so keeping money in Citibank Thailand may obviate the need to file 8938 in some cases. Here's the IRS guidance: 

 

https://www.irs.gov/instructions/i8938#idm140161186211248

 

The IRS page below looks like it states that If married to a non-resident alien and the election to file a joint return is not made, the only status available unless qualifying for head of household is married filing separately. The income threshold for reporting as MFS is $5.

 

https://www.irs.gov/newsroom/international-taxpayers-filing-status-if-married-to-a-nonresident-alien-youtube-video-text-script#:~:text=IN GENERAL, WHEN A U.S.,STATUS IS MARRIED FILING SEPARATELY.&text=ONE OPTION IS THAT BOTH,U.S. RESIDENT FOR TAX PURPOSES.

[JimGant]

6 hours ago, Wandr said:

No, not filing jointly and not claiming anyone as a dependent.  Any solution?

A long shot - marriage is not registered in US. Can I claim single status?

A rant about US tax laws would be appropriate here, but I think it's been done!

 

Why wouldn't you want to file jointly? I guess if your wife was pulling in big bucks, er bahts, that exceeded $12,400 (her half of the standard deduction for 2020 married filing jointly), then, yes, your overall tax liability would increase. But if she's a housewife with little or no income, getting her an ITIN makes complete sense (unless your gross income is less than $12,400, in which case her deduction doesn't make any difference in your tax liability). But say she does make $10,000 per year, and pays Thai taxes on it. And your gross income is over $24,800: You still get an additional $2,400 off your total taxable income, plus you can take a tax credit for the Thai taxes she pays, assuming she pays any....

 

Anyway, we don't know your tax bracket, so if your gross income doesn't warrant an extra wifey deduction, thus don't ask for an ITIN -- but you do have to file married filing separate (assuming an amphur, not monk wedding), although that won't cost you anything over filing single.

 

And if you file jointly, getting an ITIN won't affect her having to file a FBAR -- she won't have to. Form 8938's, however, yes -- but now the threshold for your both filing jointly, living full time in Thailand, is $400,000 -- and that's just financial assets, not your house, cars, or rental properties. And, not really a big deal -- just extra paperwork (and if you have that kind of money, you'll be on your yacht, not this forum).

 

No, do the math before you decide there's too much bother. I would imagine the preponderance of US/Thai marriages would benefit from the ITIN option.

 

[Etaoin Shrdlu]

5 minutes ago, JimGant said:

 

No, do the math before you decide there's too much bother. I would imagine the preponderance of US/Thai marriages would benefit from the ITIN option.

 

Jim, I agree. I think there is another advantage for having the spouse get an ITIN and file jointly and one that may affect some on this forum. I think that married filing separately while living with one's spouse changes the base for calculating whether Social Security benefits are taxed and at what rate. Do you know if this is correct?

[JimGant]

2 hours ago, Etaoin Shrdlu said:

I think that married filing separately while living with one's spouse changes the base for calculating whether Social Security benefits are taxed and at what rate. Do you know if this is correct?

Weirdly, yes. For some reason, if you're filing MFS -- and you lived with your wife at any time during they year -- 85% of your Social Security benefits are subject to tax. Now, if all your gross income, to now include 85% of your Social Security, is less than your standard deduction ($12400 in 2020), no harm, no foul. Otherwise, you need to assess the value of getting the wife an ITIN and filing Married Filing Jointly.

[Berkshire]

6 hours ago, andy said:

Have done this for the past 10 years, no problems.  Your spouse will have no US tax liability.  The IRS pubs on this issue state you cannot legally file as Single.

Hmmmm....I was under the impression that you can always file single if married to a non-citizen.  I know some married dudes that still file as single.

[JimGant]

19 minutes ago, Berkshire said:

Hmmmm....I was under the impression that you can always file single if married to a non-citizen.  I know some married dudes that still file as single.

Right. Just be prepared to explain the concept of "mIa noi" to the tax auditor. ????

[Pib]

30 minutes ago, Berkshire said:

Hmmmm....I was under the impression that you can always file single if married to a non-citizen.  I know some married dudes that still file as single.

 

 

Nope...being a citizen or non-citizen doesn't make a difference.  See partial quote and full HR Block article below.

https://www.hrblock.com/tax-center/filing/personal-tax-planning/filing-taxes-when-married-to-non-us-citizen/#:~:text=Married individuals are not allowed,to a non-U.S. citizen.

 

Quote

 

“Can I File Single if Married to Non-Resident Alien?”

Generally, no, you can’t file single if you’re married to a non-resident alien. Married individuals are not allowed to file under the single filing status, and when you are married to a non-resident alien (referred to as a nonresident spouse), you are also unable to file a joint return unless a separate election is made to do so.

Here are the options when you are married to a non-U.S. citizen. You should consider the options carefully, as each will have a different effect on your tax and reporting requirements.

 

 

[Wandr]

On 3/4/2021 at 3:59 PM, Etaoin Shrdlu said:

Jim, I agree. I think there is another advantage for having the spouse get an ITIN and file jointly and one that may affect some on this forum. I think that married filing separately while living with one's spouse changes the base for calculating whether Social Security benefits are taxed and at what rate. Do you know if this is correct?

You are correct. The Married Filing Separate status (MFS) is actually the worst filing status in terms of deductions and credits.

I had thought earlier that it would be the same as filing Single. More research shows that is not true.

The first hit is on social security income, as you mentioned. You get no breaks if you use this status. 85% of your social security income is ALWAYS subject to tax. If you are filing SIngle then there is no tax if total income is below a certain level ($25000 now I think). You pay tax on 50% of social security income beyond this limit. And then on 85% if your income is higher. You need to check the limits online.

If you don't have social security income, or your income is above the 85% limit, then this aspect doesn't matter. Otherwise you take a substantial hit. But even if you don't have any social security income, the MFS status denies certain other credits and deductions.

This is just to provide some more information to those with Thai wives.

Thanks to everyone who contributed.