Welcome Guest. Register Now!  


For 2013 Tax Tips For Year 2013.


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 04-09-2013, 08:52 AM
Staff
 
Join Date: Apr 2013
Posts: 23
foreign spouse with foreign income

My son, a US citizen, lives and works in Germany. Last year he married a woman who is a German citizen. All of his wife's income is foreign earned.
99.9% of my son's income is foreign earned.

Does he have to list her income on his US tax forms?...if so, which form would he use?

I understand that because she is not a US citizen and none of her income is from any US source, Uncle Sam cannot tax it. Is that correct?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 04-09-2013, 12:32 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
“Does he have to list her income on his US tax forms?...if so, which form would he use?”====It depends; as long as they file their US returns(fed and sate returns) jointly, they need to report all of their taxable US source and world wide income(including earned income that they earned in Germany);however, if he files his US returns under MFS status(since his Grerman spouse doesn't have any U.S. income, she is not required to pay taxes on her German income to the IRS. In such case, he can choose the marriage filing separately for his own tax return), then, he needs to report only his taxable earned income/unearned income that he earns in Germany(after he claims FEIE if he qualifies it) to the IRS/state.SO, he needs to weigh his options whether he chooses to file one joint return (MFJ), he wants to file separate returns (MFS) .If he and his spouse decide to file jointly, they have to declare their worldwide income (including exemptions, deductions and credits) as a couple in their U.S. return. Joint filing assumes them elect to be taxed on all their worldwide income and supply all pertinent and necessary documentation of tax liability. He may choose the marriage filing separately option if his foreign spouse does not choose to be taxed on her foreign income.Filing separately has higher tax rates and fewer benefits (they won't be able to claim the elderly and disabled tax credit, child and dependent care tax credit and earned income tax credit, among other deductions and credits). Yet, filing separately generally releases you from the burden of any issues or lies made by your spouse in their own tax return.
“I understand that because she is not a US citizen and none of her income is from any US source, Uncle Sam cannot tax it. Is that correct?”=======As mentioned above, it depends.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Foreign income dazedandconfused Income 1 04-02-2012 06:33 PM
foreign spouse envibeman Miscellaneous 0 03-25-2012 02:12 PM
The Foreign Account Tax Compliance Act (FATCA), requires Foreign Financial Institutions to report to IRS all financial accounts held by US Taxpayers! TaxGuru General 0 07-03-2011 05:08 PM
Can I take foreign tax credit or deduct taxes paid on foreign investments in IRA? jswift IRA/Sep 0 02-14-2010 02:03 AM
How does one qualify for Foreign Earned Income Exclusion & Foreign Housing Exclusion? TaxGuru Miscellaneous 0 05-06-2008 04:42 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.