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02-04-2018 11:07 AM
I am asking this for a friend, who is from China and has been married for a couple years, his wife also Chinese. 3 years ago, late 2014, he moved to US (still married) but his wife remained in China. He has lived & worked here in US since. According to what I have read, he must file US return either MFJ or MFS (correct?) regardless of where his wife was. His wife finally joined him stateside just last Nov. For 2015, 2016, 2017, the wife did have income in China, although don't know (yet) if from a company and whether she paid any taxes. The husband made about 16K here both in 2016 & 2017. The husband also did not have any health insurance until after she arrived 3 months ago, now they both do from his employer. Neither is a US citizen. The husband has always had a green card and SSN, while the wife now has both after she arrived. I don't think the husband has any non-US income after he came here.
Would they file MFJ for 2015, 2016, 2017 and if yes, should/must include wife's non-US income and taxes paid (if any)? From some rough figures the husband gave me for wife income in China last 3 years, their combined will be very close to just over or under MFJ filing limit, which will be crucial for ACA penalty or not. I have asked them for any documentation for the wife (like our W-2) that would help, otherwise would have to just take their word for wife income. Also, my understanding is that for 2015/2016, she could be treated for tax purposes as a Res Alien, although not actually present (NR Alien). I am also assuming probably not beneficial for guy to file MFS for any year, but not sure yet. Any insights?
Solved! Go to Solution.
02-13-2018 07:22 PM
According to the tax rules for filing a joint return, "each spouse must report his or her entire worldwide income for the year you make the choice and for all later years." What this means is that if the couple chooses to file married filing joint (MFJ) for years 2015, 2016, 2017, then the wife's non-US income must be reported on the tax returns.
For 2015 and 2016 returns, if choosing to file married jointly, then the spouse is "treated, for federal income tax purposes, as residents for all tax years that the choice is in effect." In other words, if the couple chooses to file married joint on the 2015 and 2016 return where the husband is a resident alien with a green card, then the wife, even though she is actually a nonresident alien during those years, would be treated as a resident for tax return purposes. When the couple decides to file as married joint for 2015 and 2016, they'll file either Form 1040, 1040A, or Form 1040EZ. If the husband chooses to file as married filing separately for 2015 and 2016, then in that case, he would only report his income on the 2015 and 2016 return and not have to report the wife’s non-US income (if any) for those years.
If you have any other question, I'll be glad to help.
Tax Research Specialist