Question

How to file jointly with Canadian spouse?

Forum|Forum|3 years ago
January 6, 2023
1 reply
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I'm married to a Canadian citizen, and I'm a US citizen. I live in the US, and they live in Canada, so I only earn US income, and they earn only Canadian income. We've elected to file jointly because I can't qualify for the healthcare credit anymore due to just my earnings being below the threshold required to get the credit for myself now due to marriage.

How would I file jointly with my spouse and add their income to my tax return?
They already have an ITIN number and already have a declaration written out, but I'm not sure how to add their income onto my return; since Canadians don't have W2s and have their equivalent which is a T4, would I convert their income and add it to mine, or does theirs need to go into the foreign income section somewhere?

And one other question, is it possible to amend my 2021 return and change the filing status from married filing single to filing jointly for last year?

Thanks for any advice and tips.

Employee

Yes you can amend the 2021 return to change from Married Filing SEPARATELY to MFJ.

To enter Foreign Earned Income -

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Less Common Income
On Foreign Earned Income and Exclusion, click on the start or update button

Or enter foreign income in the Search/Find box located in the upper right of the program screen. Click on Jump to foreign income

P

pk12_2

Employee

@ZaiKajou Having read through your post and the very helpful response by my colleague @Critter-3 , below are the additional steps you would need to take to get the best tax outcome:

(a) your spouse whom is living in Canada ( yes? ) would still be classed as Non-Resident Alien , even with ITIN and therefore her/his foreign income is beyond the ambit of US.

(b) When you prepare your Married Fling Jointly ( MFJ ) you would need to add a statement / request signed by both of you to request that she/he would like to be treated as a Resident for Tax purposes for the tax year in question. This would mean that you have to file by mail ( I do not believe that you can add this as an attachment to the efile ). This requirement is only for the first year that she/he wants to expose her/his foreign income to US taxes and it remains valid till changed.

(c) As part of the entries that @Critter-3 outlined above , you will have to fill out the form 2555 -- Foreign Earned Income Exclusion ( FEIE) -- this is generally better than foreign tax credit / deduction ( form 1116). However form 2555 will require you to

1. satisfy one of two tests to qualify --- Physical Presence Test ( 330 full days present abroad in any continuous 12 month test period) or Bone-fide Resident ( this requires IRS approval )

2. Spouse has a tax home abroad

(d) The above path will have to be followed even for the amendment of 2021.

TurboTax will walk you through all this and if you run into any issues and/or need clarification/ help one of will definitely walk you through .

Does all this make sense ?