US Taxes for an American Married to a Foreign Spouse
When you’re falling in love, the last thing you’re thinking about is taxes. However, taxes are inevitable, and if you have a foreign spouse as an American, you need to know how yours might change.
As long as one spouse is an American citizen or resident, taxes don’t need to get more complicated than they have to be. Married couples can still file joint returns, even if one is a nonresident alien. If your foreign spouse is a resident alien, nothing really changes, tax-wise: U.S. residents are basically taxed the same regardless of citizenship. If you both live overseas, filing U.S. taxes back home can get more difficult. But, that’s nothing that a skilled CPA can’t handle on your behalf.
US Tax Help knows that navigating tax season can be hard. Our CPAs can help you and your foreign spouse file your taxes without stress. To learn more about the CPAs for American expatriates at US Tax Help, call today at (541) 362-9127.
Can Americans Married to Foreign Spouses File Joint Returns?
If you have a foreign spouse who is neither a U.S. citizen nor a resident of the United States, you may be missing out on some tax benefits your other married friends have access to. Filing a joint tax return can be beneficial for various reasons, but can you do that if you have a foreign spouse?
For joint-filing purposes, Americans with foreign spouses can elect for their spouse to be treated as a U.S. resident for the tax year. This means that your collective worldwide income will be taxed. It also means that the American spouse must report their stateside income if applicable, and the foreign spouse will need to report their foreign income, if applicable.
This only applies to couples where one is a U.S. citizen or resident during the tax year. If you don’t want to elect for you and your foreign spouse to be treated as a U.S. resident on your annual taxes, you may qualify for head of household filing status instead. This can also be advantageous since heads of household generally qualify for a lower tax rate and a higher standard deduction for dependents than individual filers do.
If you choose not to file jointly with your foreign spouse, you can’t choose to file as single. Instead, your tax status needs to be married filing separately.
Deciding to file a joint return can be confusing at first. Doing so means that the IRS can tax your income and your foreign spouse’s income. Skilled accountants, like those at US Tax Help, can explain the benefits and potential downsides of filing a joint return with your foreign spouse. For example, did you know that joint filers generally get a larger standard deduction? And that you may be eligible for more appealing tax credits and deductions if you file jointly? Americans with foreign spouses should know that filing jointly isn’t out of the question for them and their partners.
Are Taxes Different for Americans Married to Resident Aliens?
Just because your spouse is from a foreign country doesn’t mean that they can’t live in the United States with you. While marrying an American citizen doesn’t guarantee citizenship for your spouse, they may get a green card so they can live in the U.S. with you.
Resident aliens can use the same filing forms, deadlines, and statuses available to American citizens. That means American citizens can file their annual tax returns jointly with their foreign spouses with little to no difference as long as they’re U.S. residents. If your foreign spouse has lived in the U.S. for the entire year and wants to file independently, they can be eligible for the same tax credits and deductions as any American citizen.
Do Americans Have to Pay Taxes If They Reside in a Foreign Spouse’s Country?
In cases where an American leaves the United States to live in their spouse’s country of origin, they likely still need to pay U.S. taxes and report certain foreign assets. Their spouse might also have to pay some taxes in the U.S. depending on how they file.
As long as Americans retain their citizenship, they must file taxes with the IRS. For expatriates living in their spouses’ foreign nations, the rules are clear. Americans living overseas must report their annual worldwide income to the IRS on their annual tax return. This includes any income earned in your spouse’s foreign country. You may have to submit additional forms to the IRS, including Form 8938 and an FBAR report.
IRS Form 8938, Statement of Specified Foreign Financial Assets, is necessary to complete if your foreign financial assets exceed a certain amount. Our experienced accountants can explain what foreign financial assets are and help you assess the aggregate amount you and your foreign spouse have.
U.S. expats living in their spouses’ country of origin must also make an FBAR report if they hold over $10,000 across their foreign bank accounts at any time. You may not be aware of FBAR when you first move to your spouse’s home overseas, so consulting an accountant to learn about these matters is important. You can incur financial penalties if you don’t make the proper reports and submit the necessary forms.
Since American citizens have to pay taxes regardless of where they live, it’s important to know that you can still file jointly while living outside the U.S. with a foreign spouse. In order to do so, one spouse must be an American citizen. Again, you can elect for your spouse to be considered a U.S. resident on your joint taxes to qualify for additional benefits and deductions, even if you reside overseas. However, this may mean their foreign income will also need to be taxed in the U.S.
Call Our CPAs for Tax Help Today
If you’re an American married to a foreign spouse, your tax filing might change. When that happens, having a skilled CPA by your side is ideal. Call the CPAs for American expatriates at US Tax Help today to learn more at (541) 362-9127.