U.S. Tax Issues Related to Marrying a Foreign Citizen and Moving to the U.S.

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U.S. Tax Issues Related to Marrying a Foreign Citizen and Moving to the U.S.

Love can find us at the most unexpected times, including when we are visiting or temporarily living in a foreign country. Imagine a scenario where you meet the love of your life on a work trip to Austria, and you decide to get married and have that person move with you back to the United States. While taxes are likely to be the farthest thing from your mind on such a joyous occasion, there are significant tax consequences that come with marrying a foreign citizen who comes to live with you in the U.S. At the Tax Law Offices of David W. Klasing, our experienced tax attorneys can help you navigate and avoid any potential penalties or even more serious ramifications down the line for not doing things right in the first place.

How to File Your Taxes When Living in the U.S. with a Foreign Spouse

It is always best to contact an experienced tax attorney like those at the Tax Law Offices of David W. Klasing before filing any returns, especially ones with tricky issues like being married to a foreign spouse. Generally speaking, you have the following three options if you are married to a foreign spouse and live in the United States together.

Spouse Becomes a Resident Alien or Green Card Holder

If upon moving to the United States with you, your spouse becomes a resident alien or green card holder, they will be taxed as a U.S. citizen. As such, both of your worldwide incomes for the year will be subject to U.S. taxation, and any investment incomes by either of you require reporting, including money held in offshore accounts, which will trigger FBAR requirements.

Treat Your Spouse as a Resident Alien for Tax Purposes

If your spouse is not a resident alien or green card holder, one option you have is to treat them as a resident alien for tax purposes. You will be able to file as “married, jointly,” and claim the relevant tax benefits and deductions that come with this status. On the other hand, this route will require disclosure of your spouse’s worldwide income, which can lead to higher tax assessments, especially if said income is already being taxed by their home country. Consulting with an experienced tax professional like the CPAs and tax attorneys at the Tax Law Offices of David W. Klasing before choosing to file in this way can help ensure that you are making the wisest financial decision.

If this is the route you choose, there is a significant process with which you will have to comply. You and your spouse will have to attach a sworn statement to your returns stating that one spouse is a non-resident alien, and the other is a U.S. citizen or resident alien, and you are choosing to both be treated as U.S. residents for the tax year. For this first year, you will be required to file jointly as a married couple. However, you can file separately after the first year if you wish.

Treat Your Spouse as a Non-resident Alien for Tax Purposes

Your spouse will also have the option of remaining a non-resident alien for tax purposes. In this instance, you will typically use the filing status of “married, separate.” You will lose deductions and tax credits compared to filling jointly, but you will not have to report the income or worldwide assets of your foreign citizen spouse on your tax return, which makes this a good option if your spouse makes a lot of money. So long as the spouse does not have any US-based income and is not claimed as a dependent by another US-based taxpayer, you can request and be granted an exemption from reporting the earnings and assets of the non-resident alien spouse when you file your return.

If you have dependent children who are U.S. citizens and live with you for more than half of the year, you may be able to file as Head of Household instead of as married filing separately. This will give you access to some of the better tax deductions and rates that will not apply to those who file as “married, separate.” You should always check with an experienced tax professional like those at the Tax Law Offices of David W. Klasing before choosing how to file, as your decision could have consequences down the line if you want to change the way you file or move back abroad.

See our International Tax Law Q and A Library

If You Are Unsure How to File Your Taxes with a Foreign Spouse, Contact Our Experienced Tax Attorneys Today

There are multiple different options tax-wise if you and your non-citizen spouse decide to move to the U.S. Which of these options is most beneficial for your situation will depend on the particulars of your case as well as your goals for the future. At the Tax Law Offices of David W. Klasing, our skilled CPAs and tax attorneys have years of experience helping marries couples where one spouse is a foreign citizen properly file their tax returns, and to file them in such a way as to give them the least tax liability necessary under the law. To schedule a consultation, contact us today at 800-681-1295.

Regardless of your business or individual tax needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our main office in Irvine,  the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.

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