I have a new client who is a US citizen and had $90,000 in W-2 wages. He got married in 2019 to a woman from the Philippines. She was not in the US at all in 2019 (must have been a mail order bride?). She worked in the Philippines and paid tax there.
I am preparing their 2019 tax return. Do I need to include her income she earned from the Philippines on their 2019 joint return (and then take a FTC). Any other tax reporting issues I need to be concerned with? Never quite had a situation like this before...I don't know if she has an ITIN.
Here's something to read about the subject:
Your client may have to file by mail as a written statement is required in such a case.
A couple of questions for clarification. Is the wife a US citizen or resident alien of the US, if not filing married filing joint puts all world wide income subject to US taxation. Since she had a job in the Philippines and that income would be included if you filed MFJ, I recommend MFS.
By default, your client will need to file MFS. He may, however, elect to file jointly even if the spouse was a nonresident alien for all or part of the year but these are once-in-a-lifetime type of elections.
If the Filipino spouse had compensation that could be fully or mostly excluded under foreign earned income exclusion, does not have foreign business interests, and does not have or is not anticipated to have a substantial amount of net worth, it would generally make sense to elect joint filing.
Still an AllStar
I disagree it is not a once in a life time elections READ BELOW
PUB 519 -- Nonresident Spouse Treated as a Resident
If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident
alien and the other spouse is a nonresident alien, you can choose to treat the nonresident
spouse as a U.S. resident. This includes situations in which one spouse is a nonresident alien
at the beginning of the tax year, but a resident alien at the end of the year, and the other
spouse is a nonresident alien at the end of the year.
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. You must file a joint income
tax return for the year you make the choice, but you and your spouse can file joint or separate
returns in later years.
If you file a joint return under this provision, the special instructions and restrictions for dual-status taxpayers in chapter 6 do not apply to you.
Example. Bob and Sharon Williams are married and both are nonresident aliens at the
beginning of the year. In June, Bob became a resident alien and remained a resident for the
rest of the year. Bob and Sharon both choose to be treated as resident aliens by attaching a
statement to their joint return. Bob and Sharon must file a joint return for the year they make the
choice, but they can file either joint or separate returns for later years.
How To Make the Choice
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. (If one spouse
died, include the name and address of the person making the choice for the deceased spouse.)
Amended return. You generally make this choice when you file your joint return. However,
you also can make the choice by filing a joint amended return on Form 1040-X. Attach Form
1040 or 1040-SR and print “Amended” across the top of the corrected return. If you make the
choice with an amended return, you and your spouse must also amend any returns that you
may have filed after the year for which you made the choice.
You generally must file the amended joint return within 3 years from the date you filed
your original U.S. income tax return or 2 years from the date you paid your income tax for that
year, whichever is later.
Suspending the Choice
The choice to be treated as a resident alien is suspended for any tax year (after the tax year
you made the choice) if neither spouse is a U.S. citizen or resident alien at any time during the
tax year. This means each spouse must file a separate return as a nonresident alien for that
year if either meets the filing requirements for nonresident aliens discussed in chapter 7.
Example. Dick Brown was a resident alien on December 31, 2016, and married to Judy, a
nonresident alien. They chose to treat Judy as a resident alien and filed joint 2016 and 2017 income tax returns. On January 10, 2018, Dick became a nonresident alien. Judy had remained a nonresident alien throughout the period. Dick and Judy could have filed joint or separate returns for 2018 because Dick was a resident alien for part of that year. However, because neither Dick nor Judy is a resident alien at any time during 2019, their choice is suspended for that year. If either meets the filing requirements for nonresident aliens discussed in chapter 7, they must file separate returns as
nonresident aliens for 2019. If Dick becomes a resident alien again in 2020, their choice is no
Ending the Choice
Once made, the choice to be treated as a resident applies to all later years unless suspended
(as explained earlier under Suspending the Choice) or ended in one of the following ways.
If the choice is ended in one of the following ways, neither spouse can make this choice in
any later tax year.
1. 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.
The spouse who revokes the choice must attach a signed statement declaring that
the choice is being revoked. The statement must include the name, address, and
identification number of each spouse. (If one spouse dies, include the name and
address of the person who is revoking the choice for the deceased spouse.) The
statement must also include a list of any states, foreign countries, and possessions
that have community property laws in which either spouse is domiciled or where
real property is located from which either spouse receives income. File the statement as follows.
a. If the spouse revoking the choice must file a return, attach the statement to the return for the first year the revocation applies.
b. If the spouse revoking the choice does not have to file a return, but does file a return (for example, to obtain a refund), attach the statement to the return.
c. If the spouse revoking the choice does not have to file a return and does not file a claim for refund, send the statement to the Internal Revenue Service Center where you filed the last joint return.
2. Death. The death of either spouse ends the choice, beginning with the first tax year following the year the spouse died. However, if the surviving spouse is a U.S. citizen or resident and is entitled to the joint tax rates as a surviving spouse, the choice will not end until the close of the last year for which these joint rates may be used. If both spouses die in the same tax year, the choice ends on the first day after the close of the tax year in which the spouses died.
3. Legal separation. A legal separation under a decree of divorce or separate maintenance ends the choice as of the beginning of the tax year in which the legal separation occurs.
4. Inadequate records. The IRS can end the choice for any tax year that either spouse has failed to keep adequate books, records, and other information necessary to determine the correct income tax
liability, or to provide adequate access to those records.