ITIN For Spouse of US Citizen/Resident
Why do I need to have 1040 Filing Status as Married Filing Joint [MFJ] and not MFS when the ITIN application is in the process?
As experienced IRS, Approved Certified Acceptance Agent (C.A.A.) for over 10 years now, and as US Personal tax preparers/Consultants handling our global 1040 Personal tax compliance service, we come across this question very often.
To file an ITIN application for my spouse. If you are legally married as of 31st Dec 2022, On my 1040 tax return filing status your filing status should be Married Filing Jointly with your spouse's name as the foreign passport
It's not necessary who have to file Married Filing Jointly(MFJ.) ONLY. You can also file as Married Filing Separately (MFS) if you already have an ITIN approved. For the first year of ITIN application for the foreign spouse category, it is always Married filing Jointly until the tax year 2025.
Since the 2018 tax year, we have had an ITIN rejection for MFS status from the IRS ITIN approval office with the reason as there are no tax exemptions benefits with MFS status since the 2018 tax year.
Reasons many of our clients choose to file Married Filing Jointly (MFJ) from the 2018 tax year onwards are listed below:
Advantage of the Married Filing Jointly MFJ states
From 2018 to 2025, the tax rules changed with no personal exemption of $4,050 available for the taxpayer or the spouse (The personal exemption was available until the 2017 tax year), so by filing Married Filing Separately(MFS) or Single your final tax due on the 1040 return would be same.
From 2018, with new tax rules, the standard deductions for the Married Filing jointly (MFJ) increased from $12,550 to $25,100, giving an additional deduction of $12,550 from your gross income, resulting in a reduction in taxes due or an increase in refund on computation.
Married Filing Jointly (MFJ) status is also beneficial to foreign nationals' spouse who has no income in the USA or a foreign country. Even if the foreign national spouse is working outside of the USA, then he/she is eligible to claim foreign earned income exclusion of $112,000 per person [For the 2022 tax year] and eligible to claim Foreign tax credits (FTC) for taxes paid in a foreign country.
The disadvantage of the Married Filing Jointly MFJ states
Married Filing Jointly (MFJ) requires a joint election filing of IRC section 6013(g) to be elected, treating a nonresident alien spouse as a US resident alien and subject to worldwide income reporting and Foreign Bank Account Reporting. The 6013(g) is a revocable election, so if the foreign national spouse does not wish to file 1040 US tax returns jointly in future tax years, he or she can revoke the election and opt out of the US tax system for any particular tax year or future tax years.
Your CPA with US expatriate tax and international tax experience should be in a position to determine the best filing status option based on the source of income and having the numbers run on tax software.
Our team specializes in international expatriate U.S. personal tax return services. If you need assistance with ITIN Renewal/US 1040 filing for refund claim/FATCA Compliance work/FBAR FINCEN114 Filing, ITIN/ Form W7 Application/E.I.N./Form W8BENE or Certified Acceptance Agents [C.A.A.] services/1040NR U.S. tax filing for refund claim of excess 1042S / 8288A/ 8805/ W2/ 1099. We are happy to assist our clients in a timely, efficient, and cost-effective way
