Usa Tax Question For Marriage To Thai Wife

[JPPR2]

Is there a tax benefit for all the work? I would prefer to remain off the US Tax radar. If you are saving a few hundred bucks, I would leave it alone and file single.

However I am retired with no intentions of work so filing tax returns in US are somewhat moot.........However I think I want to know the tax benefits.

[InterestedObserver]

Is there a tax benefit for all the work? I would prefer to remain off the US Tax radar. If you are saving a few hundred bucks, I would leave it alone and file single.

However I am retired with no intentions of work so filing tax returns in US are somewhat moot.........However I think I want to know the tax benefits.

And you do not collect Social Security or have IRA and/or investment income. Tax free??? If you are in Thailand on a retirement extension of stay what funds do you declare to immigration?

[fiddlehead]

Well then think that then.

Enjoy the hassle of the other forms of proof.

I am at a loss of what else to tell you.

You simply either do not want to take the time to read the instructions, or you can't understand them.

It states that her passport will be returned along with her ITIN.

Don't get upset with me now.

I'm trying.

It's a lot to read and I just now read that part.

Do you think they'll send it to Thailand?

I plan to do an online tax deal.

That way, I can try it both ways (single or "married filing jointly") and see the bottom line and know how much all this hassle is actually going to be worth.

I have used taxslayer the last few years and it pretty easy.

I think i'll just send in her passport and hope to get it back and then don't have to fly to Bangkok for the hassle of the certified copy.

Thanks everyone for all your help.

[mstribling]

Sorry if I was short with you. I was in the exact same spot. In the end I weighed the cost of traveling to BKK visiting the ministry of foregeiner affairs, the US embassy and their $50 per page fees. We figured if they lost the wifes passport we would just claim it as lost and request a new one. Cheaper than anything else.

Of course the wife would have to grovel some, claim some Khmer stole it,etc etc.

End result it showed up in the mail

[JimGant]

However I am retired with no intentions of work so filing tax returns in US are somewhat moot.........However I think I want to know the tax benefits.

Presumably you do have some kind of income stream in retirement.... So, this does mean you might be subject to US taxes.

For 2010, however, if you're filing single, and have a gross income of no more than $9,350, you're not subject to US income taxes. However, if above that, you might want to get a Thai wife and a form W-7 -- since you could now have a gross income of $18,700 -- and not be subject to US income tax.

And if a gross income of $25k, a Thai wife would save you about $1300 (taxes of $1929 filing single, $630 filing jointly). ($50k gross, a wife would save you about $2500.)

Now, here's a potential kicker:

If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year. Neither you nor your spouse can claim under any tax treaty not to be a U.S. resident. You are both taxed on worldwide income.

So, if the wife is making big bucks herself in Thailand -- and being taxed by Thailand -- this income will now be subject to double taxation, as she's *supposed* to declare this income for US tax purposes as well.

But, I imagine very few Thai wives are paying Thai taxes on their avocational businesses. And of course, no 1099 or W-2 data trails, nor related Schedule C's. So, I doubt there are many situations where Uncle Sam would need to examine wifey's income, er, net losses.

[JPPR2]

Is there a tax benefit for all the work? I would prefer to remain off the US Tax radar. If you are saving a few hundred bucks, I would leave it alone and file single.

However I am retired with no intentions of work so filing tax returns in US are somewhat moot.........However I think I want to know the tax benefits.

And you do not collect Social Security or have IRA and/or investment income. Tax free??? If you are in Thailand on a retirement extension of stay what funds do you declare to immigration?

Answering your questions

No and No. At 59.5 I will access my IRA but I know that max amount of dispersement liability to avoid tax liability, then at 62.5 I will start my SS. For now, I have quite a few years until I hit the IRA mark. Just using my savings from my home sales in US which should cover me until IRA time.

Anyway do not want to get off on tangent and hijack thread, just curious if there is a benefit adding Thai wife to US tax filings. If I ever married here I would not. Seems like you open up a lot more info for very little return. Years ago dependents used to help, but not now

[fiddlehead]

OK, It's time to do something about this (today)

But, although I hear from people that they got their ITIN number back in 6 weeks after applying (that gives me just barely time to get it done before the April 16 deadline), I see that it (W-7) must be turned in WITH my taxes.

So, I guess that means I have to put it off till later. Procrastinate.

As, I'm not ready with the rest of my tax stuff.

Any other ideas?

once again, thanks to everyone who replied and helped me out here.

I do think it's a worthwile deduction and hopefully some others learned what it takes to claim your Thai wife. (and hope it works)

fiddlehead

[BuckarooBanzai]

Sorry if I was short with you. I was in the exact same spot. In the end I weighed the cost of traveling to BKK visiting the ministry of foregeiner affairs, the US embassy and their $50 per page fees. We figured if they lost the wifes passport we would just claim it as lost and request a new one. Cheaper than anything else.

Of course the wife would have to grovel some, claim some Khmer stole it,etc etc.

End result it showed up in the mail

Just to clarify, the US Embassy notary fee is for a set of pages and not per page. For example - if you have 10 pages that are part of a set they will bind the pages and notarize the set for the standard fee.

[mstribling]

Sorry if I was short with you. I was in the exact same spot. In the end I weighed the cost of traveling to BKK visiting the ministry of foregeiner affairs, the US embassy and their $50 per page fees. We figured if they lost the wifes passport we would just claim it as lost and request a new one. Cheaper than anything else.

Of course the wife would have to grovel some, claim some Khmer stole it,etc etc.

End result it showed up in the mail

Just to clarify, the US Embassy notary fee is for a set of pages and not per page. For example - if you have 10 pages that are part of a set they will bind the pages and notarize the set for the standard fee.

Ok. Thanks.

[JPPR2]

OK, It's time to do something about this (today)

But, although I hear from people that they got their ITIN number back in 6 weeks after applying (that gives me just barely time to get it done before the April 16 deadline), I see that it (W-7) must be turned in WITH my taxes.

So, I guess that means I have to put it off till later. Procrastinate.

As, I'm not ready with the rest of my tax stuff.

Any other ideas?

once again, thanks to everyone who replied and helped me out here.

I do think it's a worthwile deduction and hopefully some others learned what it takes to claim your Thai wife. (and hope it works)

fiddlehead

I agree, based on JimGants feed back it appears quite worthwhile. I appreciate the info, great thread. I printed this info and filed. I am not married ( dating) but good info should I ever decide to take the plunge.

Thanks. Good luck to you

[JimGant]

Fiddlehead, this isn't as tough as you're making it out to be.....

It looks like you've already decided to mail-in the wife's passport. Good choice -- assuming she doesn't plan to travel during the 10 weeks or so the Feds are processing the W-7.

And, you've already been warned many times about the W-7 accompanying your 1040. So true! (Mario's info is dated.)

After your Form W-7 has been processed, the IRS will assign an ITIN to the tax return and process the tax return. Federal tax returns accompanied by an application for an ITIN should be mailed to:

Internal Revenue Service

ITIN Operation

P.O. Box 149342

Austin, TX 78714-9342

This two-step process is fairly straightforward: the W-7 is processed first (at which point, hopefully, the passport is returned); and your wife's new ITIN is affixed to your 1040, which is then forwarded to the tax gurus.

I'm trying to understand all this. If I file the W-7 with my tax form this year, will I be able to use her as the "married filing jointly" option?

Yes. Your 1040 for tax year 2010 should be accomplished in the "Married, Filing Jointly" mode. The only thing missing will be her ITIN (to be filled-in later by the Feds).

Not seeing any talk of a wife as a dependent. Only children, brothers, half brothers, blah blah blah.

This takes care of itself when filing "Married, Filing Jointly," as she gets her own exemption (equivalent to each named dependent getting one exemption).

As, I'm not ready with the rest of my tax stuff.

Living overseas, you've got until June 15 to file without penalty (interest on taxes due, however, is not waived -- but normally not assessed on us smallfry).

Also, per Pub 519, don't forget to attach to your 1040 the following:

>>Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following information:

A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year, and that you choose to be treated as U.S. residents for the entire tax year.

The name, address, and identification number of each spouse (here just write "ITIN pending.")<<

[fiddlehead]

Wow! Thanks a lot Jim.

That is a lot of valuable info.

And thanks again to mstribling and all others who helped contribute to my decision.(s)

Good luck to all of you with the tax headaches.

[hawthorne]

I agree with the several post which offer the choice of not putting your wife on your tax forms. I think this works well for those not living in the USA and your wife works or is planning on working or has INVESTMENTS. If she does not have investments maybe she should start. Legally you can live off your income and have your wife invest her income fully in her name and whatever earnings she has is not taxable to the US. We live overseas and my wife is not taxable now to Thailand (out of country for more than one year). She makes a very good income and her investments are growing very fast due to investment of her full income.

I have lots of friends who report thier wives because they do not work. At first this was beneficial for tax claims. Now they want to change because as most wives do they send money home and so forth. NOw these people no longer want to claim this money and its earnings but legally they have not found a way to solve this problem. I can not imagine you save much by claiming your wife versus having your wife invest tax free. The frist few years yes but as time marches on hopefully the investment income comes quite substantial as is everyones dreams and wishes. The wife does not benefit at all from the USA federal govt so why pay taxes for services not partaken/?

[JimGant]

Obviously, if the wife's taxable income is increasing every year, you'll reach a point where not filing jointly, thus reverting back to filing as a single, becomes more advantageous.

For the American husband with a gross income (adjusted gross income for the purist) of $50,000, in the previous example, his Thai wife would have to have a taxable income of more than $16,573 for it to make sense to switch back to filing single.

NOw these people no longer want to claim this money and its earnings but legally they have not found a way to solve this problem

Easy, just revoke this election, and switch back to filing single (however, you can never reverse this action in the future).

Form Pub 519:

Revocation. Either spouse can revoke the choice for any tax year, provided he or she makes the revocation by the due date for filing the tax return for that tax year.

Sounds like a win-win situation: when the wife's poor, elect to file jointly. But once she has over a quarter of million bucks , earning 6% annually, switch back to filing single....