Tax Accountant for U.S. Expats Married to Foreign Citizens
Moving overseas and becoming a U.S. expat carries a number of advantages, not least of which is the opportunity to meet new and interesting people. If, after starting a life abroad, you happen to fall in love with a foreign citizen and get married, one of the considerations you’ll have to face is how to handle your relationship (and your spouse’s) with the Internal Revenue Service. Luckily, you have a few options when it comes to determining the tax status of your foreign-born spouse, but making the right choice is often easier said than done.
With the aid of US Tax Help’s experienced international tax accountants for U.S. expats married to foreign citizens, you can examine every possibility and make the decision that’s best for your family’s finances. Learn more about all our tax services for expats or schedule your first consultation by visiting US Tax Help online or calling (541) 362-9127 today.
U.S. Expats Filing Separately When Married to a Foreign Citizen
Of the three choices available to expats with spouses who are foreign citizens, the first – and perhaps simplest – is to file your taxes under the “Married, Filing Separately” classification. With this option, your spouse would be treated as a nonresident alien for U.S. tax purposes, which means that – as long as they don’t have any income from within the U.S. – they won’t have to pay any taxes or file a return with the IRS.
While this option may seem advantageous, choosing to file separately means that an expat can only claim exemptions, exclusions, credits, and deductions as an individual. If you have significant income beyond what’s covered under the foreign earned income exclusion, filing separately could actually cause you to pay more in taxes, depending on how much your spouse earns. However, if your spouse has significant income, electing not to tax them under IRS rules may be the smarter choice. A knowledgeable accountant can give you a clearer picture of whether this would make sense in your situation.
U.S. Expats Married to Foreign Citizens and Filing Jointly
The second tax filing option available to U.S. expats married to foreign citizens is to file a joint return with your spouse, which would mean electing to treat your husband or wife as a resident alien for income tax purposes, although it’s worth noting that they won’t have to pay any Social Security or Medicare taxes. To do so, they will likely need to apply for a taxpayer identification number or Social Security number, and there will be some special steps to follow when filing. However, there are also some important considerations to keep in mind when making this choice.
For instance, this choice is, in effect, a permanent change in your spouse’s filing status, so choosing to file a joint return will mean that you have to do so for subsequent years as well. In a few very specific circumstances, this decision can be suspended, but it requires a loss of citizenship or residency. In addition, either spouse has the option to end the arrangement at any time, but doing so revokes your right to choose joint filing status with a foreign citizen for the rest of your life, regardless of who you might be married to. In other words, this is a decision an expat can only make once, so you must choose wisely.
That said, there are some advantages to choosing joint filing status, such as the ability to claim greater deductions and credits. If your spouse doesn’t work or only receives income from foreign sources, which can be excluded from taxation – a likely scenario for a foreign citizen – then you may not be adding any taxable income to your financial obligations, effectively allowing you to receive more extensive tax breaks at no additional cost.
Head of Household Status for U.S. Expats Married to Foreign Citizens
The third filing option for which you might qualify as a U.S. expat married to a foreign citizen is head of household status, which would only apply if your spouse continues to be treated as a nonresident alien by the IRS. It should also be noted that a spouse who is a nonresident alien cannot be claimed as a dependent in this situation, but most other relatives can.
To qualify as a head of household with a spouse who is a foreign citizen, you must meet one of the following criteria:
- You pay more than half the cost of housing for a parent, who you claim as a dependent.
- You pay more than half the cost of housing for your home, which also houses an unmarried child or grandchild, a married child or grandchild who you claim as a dependent, or one of a number of different relatives ranging from in-laws to siblings.
Should you meet one of these classifications, you can file your taxes as a head of household, which brings a more favorable tax rate and greater standard deduction. However, whether this is the best filing status in your situation will depend on a number of factors; speak with a qualified international tax specialist to learn more.
Call Our Skilled International Tax Accountants for Married U.S. Expats Living Abroad
Tax time can be a confusing and stressful period for anyone, but for U.S. expats married to foreign citizens, the demands can be even greater. With the aid of a skilled expert in international tax planning and preparation, however, you can save yourself time, expense, and headaches. To learn more about how the specialists at US Tax Help can assist you in satisfying the IRS while minimizing your tax obligations, set up a consultation today by visiting us online or calling (541) 362-9127.