Taxes for Americans

[westsail]

If your income is less than $20,000 and your filing staus is "Married Filing Jointly" you are not required to file a federal tax return, See form 1040 instructions at IRS.gov.

Try to make sure that whoever is paying you does not withhold taxes and you won't have to file just to receive a refund.

I hope that you have additional funds to supplement your $16k annual income. It may be possible to live here with your wife on that amount, but it would be a pretty meager existence.

Good luck to you!

[TallGuyJohninBKK]

Yes you can deduct your wife and daughter on income tax as they have a SS number. I have been deducting my girlfriend for years using a ITN number. The ITN is used by people who have dependants living outside the US and they do not have a SS number and cannot obtain a SS number. When I applied for mine some years back at the IRS office the very helpful staff knew what I wanted and what forms to file.

Moe, I took particular note of your comment above about claiming your GF as a dependent for federal tax purposes, because I could be in a potentially similar situation.

So when I was doing my federal taxes this year, I researched that issue in TurboTax. And according to TurboTax, to have a non-family (non-blood) relative qualify as a dependent for tax purposes, they have to meet various criteria, including...

...being a citizen or resident of the United States, or being a resident of Mexico or Canada...

So if someone's GF was a non-U.S. citizen or resident, such as a Thai citizen living in Thailand, that wouldn't seem to fit with claiming her as a dependent under IRS rules.

Edited May 15, 2014 by TallGuyJohninBKK

[CaptHaddock]

If your income is less than $20,000 and your filing staus is "Married Filing Jointly" you are not required to file a federal tax return,

True, but you should always file even if you don't have to in order to avoid having the IRS ask you to demonstrate that you don't have to file. Filing, even when you don't have to, is a "safe harbor." There is never a penalty for filing.

[TallGuyJohninBKK]

Anyone here who's married filing jointly AND has a Thai wife who's earning a salary in Thailand???

I'm assuming, her income becomes reportable to the IRS... But how, if at all, do you provide documentation (or enter the amount) of the wife's salary when doing your joint 1040???

[CaptHaddock]

A Thai national who is neither a US citizen nor a green card holder and does not live in the US is a Non-resident Alien for income tax purposes. The US spouse can not file as "married, filing jointly" and owes no income tax on the alien spouse's income.

Anyone here who's married filing jointly AND has a Thai wife who's earning a salary in Thailand???

I'm assuming, her income becomes reportable to the IRS... But how, if at all, do you provide documentation (or enter the amount) of the wife's salary when doing your joint 1040???

[TallGuyJohninBKK]

Pib, Captain, et al...

I too was reading articles on this subject lately that did indeed say foreign expat living farangs have the choice to file jointly and include their Non Resident Alien spouse's foreign income in your U.S. tax return.

Here's a pretty detailed discussion of the various options, from the Taxesforexpats.com website:

http://www.taxesforexpats.com/articles/expat-tax-rules/tax-return-with-foreign-spouse.html

Option 2: Choosing to Include Your Spouse’s Income on Your US Expat Tax Return

Now it’s time to take a look at what it means to include your NRA spouse’s income on your US expat tax return. Many US Citizens living abroad with a foreign spouse will find this option advantageous, but it’s important to exercise this option with both eyes open. Choosing to have your NRA spouse recognized as a US Taxpayer by the IRSfor the purpose of filing a joint return is not an option you can reverse and reapply when it suits you; it’s an option you can exercise only once in a lifetime. If you divorce and wind up marrying another Non-US Citizen, this option will not be available to you.

There are more implications to this decision than the tax benefits, as well. Among them is that of the future status of your NRA spouse and his/her income and assets. He/She will be required to file taxes and report qualifying foreign accounts in future years whether you file a joint return or you file separately. If you anticipate big changes in the future that include your foreign spouse having more income, working with profitable investments, or receiving a large inheritance of cash or valuable assets you may want to hold off on this decision.

Who Benefits?

If your foreign spouse has little or no income, you could file a joint return to take advantage of the additional deductions and exclusions which would apply to your combined income. This would essentially double your deductions and significantly reduce your tax liability. If you’re in a particularly high tax bracket and your spouse’s income is very low or nil, this option is extra beneficial; you may be able to exclude enough income and take enough deductions to reduce your tax bracket to a lower level percentage of taxation.

Not only would your standard deduction and other exclusions be higher, you would also be able to deduct up to $5K-$6K (below/above the age of 50) of any tax-deferred contributions made by your NRA spouse to a qualifying retirement or pension plan to further reduce your tax liability.

When considering this option, take into account all sources of income of your NRA spouse. If he/she has no income or assets, it should be an easy decision. If there are mutual funds or other investment accounts, properties, financial accounts worth over $10K, interest bearing accounts, or any other possible sources of income, you may want to not only consider the amount of income earned but also the complexity of filing returns involving passive foreign investment companies. In the end, it may make more sense to keep your NRA spouse off the radar and take advantage of his/her financial assets and shelter as much of your income as possible through the high foreign spousal gift tax exclusion.

So my original question stands: if you did choose to include a Thai spouse's income, how/where to report and/or document it on your 1040?

Edited May 18, 2014 by TallGuyJohninBKK

[ubonjoe]

A Thai national who is neither a US citizen nor a green card holder and does not live in the US is a Non-resident Alien for income tax purposes. The US spouse can not file as "married, filing jointly" and owes no income tax on the alien spouse's income.

Anyone here who's married filing jointly AND has a Thai wife who's earning a salary in Thailand???

I'm assuming, her income becomes reportable to the IRS... But how, if at all, do you provide documentation (or enter the amount) of the wife's salary when doing your joint 1040???

Correct you have to file as head of household and you get a lower deduction for your wife.

[Pib]

Anyone here who's married filing jointly AND has a Thai wife who's earning a salary in Thailand???

I'm assuming, her income becomes reportable to the IRS... But how, if at all, do you provide documentation (or enter the amount) of the wife's salary when doing your joint 1040???

Here's an HR Block article on the subject: Link.

Apparently you got four filing options: Married Filing Separately, Married Filing Separate with Spouse as Dependent, Head of Household, or Married Filing Jointly. Of course there are devil in the details/fine print associated with the filing status.

[TallGuyJohninBKK]

And the Married Filing Jointly info from Pib's HR Block link:

'Married Filing Jointly'

The final option is for you and your spouse to make an election to treat your spouse as a US resident only for US tax purposes. Making this election allows you and your spouse to file a 'Married Filing Jointly' tax return. Filing 'Married Filing Jointly' will allow you and your spouse to take advantage of credits and deductions that are not available to taxpayers who do not file a joint return; however, it will also subject your spouse’s entire income to US taxation and possibly subject your spouse to other reporting requirements. Thus, this status is most beneficial if your spouse does not earn any income or otherwise have any accounts or investments that may cause negative tax attributes.

If one's Thai spouse is earning little or no income and that's the outlook for the future as well, there appears to be reasonable advantages to doing a "married filing jointly."

But the more income the Thai wife is earning or expects to earn for the future, the potential grows for the added taxation on the wife's income outweighing the benefits of married/filing jointly deductions and exemptions.