U.s. Tax Info?

[jaideeguy]

I'm a retired American, married with children, living in LOS and need advise [professional or first hand] regarding claiming my wife and two children as dependants. We are legally married with amphor papers and she has my family name. the children still have their former family names, but soon i will file for legal adoption. is there anyone out there with experience and/or knowledge of the IRS 'rules' on this situation?? i filed for an extention so i could work this out, but the extention is quickly expiring.

thanks in advance for any info.....

jd

[lopburi3]

You can file your wife as dependent (if married last year) but she must include a paper that her worldwide income will now be taxed as a resident of the US. For a wife that is not employed a good idea - not for a wife that is or has large bank accounts/investment income. There should be full instructions in the publications online.

Children will not make it for last year and requirements are very strict (believe they either have to be US citizens or resident in the US) but you should be able to find online.

Your wife will also have to have a tax payer identification number and believe new procedure is to file for that with tax paperwork but check on it also.

[jaideeguy]

Thanks for the info, Lopburry3.....we've been married [by thai law] for almost 5 yrs now and do you think that i can apply for some retroactive refund for the years that i didn't include her as a dependant??

[chownah]

You should go to the IRS website or an official IRS publication and get your answers....tax laws do change....I'm not sure if Lopburi3 is correct...I read about this before and my memory is that you can not deduct her...but I could very well be wrong on this and if I wanted to know for sure I'd get the answer straight from the people who would be harassing me if I get it wrong.

[lopburi3]

I believe he is talking about filing a joint return so that he can obtain deductions for both and my information is for that so I should have worded my answer differently. Thanks. And I am doing that.

THIS is the official requirement from IRS.

I do not believe you can file for previous years.

[lanny]

Well, so far, the replies have been more or less correct but not really clear explanations of the alternatives.

First, you cannot claim any of the exemptions on your own return. Only if you file a joint return with your wife is her exemption available. To file a joint return, both you and the wife must make an election to treat her income, worldwide, as being subject to US taxes. Generally, not a good idea if she has, or will have in the future, a significant income that would thus be taxed in the US. Once the election is made, reversing the election in future years is very complicated.

To be claimed as dependents, the children must be US citizens or residents. Just adopting them is not sufficient. You need to check with the Embassy on changing their status and getting them social security cards.

If you do not file a joint return, you can use the children to qualify you as head of household. Otherwise, you must file as married filine separately -- at penalty rates.

You can file amended return for 2003, 2004, and 2005 (or an original return if you have not filed yet.) The statute of limitations bars any refunds or additional assessments beyond three years.

If you filed an extension request on Form 4898, you have until October 15 to file your return. If you owe money on your return, you will not be assessed a late filing penalty but will be charged a late payment penalty and interest from 4/15.

I am not a representative if the IRS. Nevertheless, taxes are my business.

[el jefe]

Lopburi's link above has most of the answers and Lanny's analysis is correct.

I just have two additional comments:

1. You can still amend your 2002 tax return if you had a properly filed extension until October 15, 2003 for that year. Otherwise 2003 is the earliest year you can amend.

2. Your wife obviously must sign all of the returns. You are now both liable for any tax due related to the other's income and assets.

[lopburi3]

I still have my doubt's that IRS will allow amendments for prior years to a joint return as the wording is specific that the declaration is for the tax year involved and subsequent years. Otherwise you just glide without making declaration and if it later looks better you file amendment. Not usually the way government works.

[DrFisher]

To spite the fact my wife and I were married in the US and our children were borne there all I had to do was get social security numbers for them, however as by Thai/US treaty I can earn a lot of money here before I have to pay tax to the US but I do have to pay Thai tax because I work for the Thai government as little as it may be (about 8B per 1,000B). I hope that helps.

[lanny]

To spite the fact my wife and I were married in the US and our children were borne there all I had to do was get social security numbers for them, however as by Thai/US treaty I can earn a lot of money here before I have to pay tax to the US but I do have to pay Thai tax because I work for the Thai government as little as it may be (about 8B per 1,000B). I hope that helps.

The treaty between the US and Thailand does NOT exempt American citizens from paying US income taxes. The second paragraph of the first article of the treaty is the so-called "savings clause." It says that either country may tax its own citizens as though the treaty does not exist. In other words, each country taxes its people without regard to the treaty; only citizens of one country are protected from taxes levied by the other.

You may not have to pay US taxes if you qualify for the exclusion or the foreign tax credit but this is not a feature of the treaty.

This can be a very complex issue and is probably made even more complicated by the recently passed new tax law. US citizens living and working in Thailand (or any foreign country, for that matter) should probably take a look at their situation and prepare for possible increases in US taxes. For many US expats, the increase may be substantial.