# First time filing as married - I have a basic question



## Big Swifty (Jan 16, 2021)

I am a US citizen living abroad and married to someone who has never stepped foot in the US. So far, all the information I´ve found while researching online refers to US citizens with non-citizen spouses who are living in the US as either residents or non-residents.

I´ve always filed as Single. I´m assuming I would now file as Married Filing Separately, but am unsure if this is disadvantageous or if I also have the option of filing jointly, even though my wife has no residency status in the US.

My wife earned zero income for the past tax year. Health reasons make it so that she can´t work, so in a manner of speaking, she´s dependent on me. We have no children and no other dependents. I also have no idea if this would have an effect on this round of stimulus checks going out now, or any future stimulus payments.

My primary concern is to not run afoul of the IRS by trying to gain something I´m not eligible to receive or in any way filing in an erroneous way, but I also don´t want to put myself at a disadvantage or leave potential stimulus money on the table by not filing correctly if I´m entitled to file jointly and include my wife in my tax situation. 

Any information/suggestions are greatly appreciated.


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## Bevdeforges (Nov 16, 2007)

Take a look at IRS publication 54 for all the details on this and other issues. About Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad | Internal Revenue Service

Basically, you would normally file as Married, filing separately - though this filing status does have a number of disadvantages, including a much lower filing threshold ($5 last I knew) and you aren't eligible for various credits and deductions. Pub 54 explains (a little bit) the option to file jointly with a NRA spouse - the main issue being that you would then be expected to declare all of her "worldwide income" along with your own.

Officially, the recovery checks are supposed to be paid out only to US citizens, and in the first round they apparently only paid a single benefit in the case of US citizens filing jointly with their NRA spouses. Ironically, because they also made payments to those drawing US SS benefits, they seem to have paid out recovery checks to non-citizens on SS overseas. 

In any event, if you want to file jointly, you'll have to get an ITIN for your wife (a taxpayer identification number that resembles a SSN but isn't one). 

For the first year, run the numbers - i.e. do a mockup of your return both ways, MFS and Joint, and see which way benefits you.


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## Moulard (Feb 3, 2017)

You do have the option with your partner to make an election for them to be treated as a US Person. This is required for you to be able to file jointly. 

Personally I would keep them out of the US tax system unless there is a strong reason to do otherwise. An imbalance between your two incomes can be a reason, as it will result in higher thresholds for reporting, and access to some tax benefits that are not available for those filing separately. But it is a rather poisoned chalice which should only be drunken from with extreme care and as a last resort.

Is this the first year you will be filing from abroad? If it is then there are a bunch of other things you will need to be aware of and consider moving forward.


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## Big Swifty (Jan 16, 2021)

Thank you both for the suggestions so far. I will take a look at IRS pub. 54 over the weekend.

I had a feeling it would be better to file separately and keep my wife out of the US tax system as opposed to jointly for the reasons mentioned. I´ll explain my situation with a bit more detail.

This will be the first year I´ll be filing from abroad. Since becoming a permanent expat as opposed to just spending 6 months or so outside of the US, I haven´t been required to file taxes. My wife is Peruvian, and as mentioned, has never been to the US. She has a chronic health condition and for many years has not been working, so no income to report to the IRS. She was just approved this month to receive a monthly disability pension from the govt. It amounts to about $200 a month. Unless there´s an advantage to officially placing a business in her name, she won´t be having any outside source of income other than her disability and I´ll be the one earning and covering expenses. Unless the advantages of filing jointly outweigh the negatives of making her a part of the IRS system (and all that currently and potentially entails) I´d rather keep her out of it if it only means a short term gain or benefit as far as minimizing my obligations.

I´ve been fortunate enough to live off of my savings. Any work I ever did to keep busy (teaching) was under the reporting threshold so I never bothered filing.

About a year and half ago I started a small photography/virtual tour creation business, but since 98% of my clients were hotels/restaurants that rely on higher end international tourism, business has been non-existent since mid-March due to COVID-19 travel restrictions. I tried shifting my services to the real estate industry, but cultural differences in how agencies sell houses and how people value the concept of time saved meant there was no genuine interest beyond talking about how good of an idea it is over a cappuccino. Nobody is motivated by the idea of selling a home faster and everyone here is content to let a listing sit on the market for a year or more and using the bare minimum of marketing tools as opposed to making any kind of investment to sell their listings faster beyond using their cellphone. It is what it is.

However, due to COVID, people who offer the same service in the US/Europe/Australia are busier than before. So I´m in the process of starting a business where I would be doing for other photographers the computer work that I normally do on my own work. Basically I´d be exploiting myself by working for a lower wage than I would earn in the US, but that would provide us a comfortable living in S. America.

At first it will just be me working by myself. Eventually I´d like to get to the point where I can take on more clients and hire no more than a handful of other people. At this point in life I´m not interested in managing anything larger than that.

Some other details. We are moving to Argentina at the beginning of February so that my wife can get better medical treatment. Both of her brothers live there, (one with residency, the other I believe has citizenship) as well as her parents. I already have work lined up narrating instructional videos for the US market and handling customer inquiries for interested potential clients, but that alone should be under the IRS threshold.

I´m just starting to research the formalities of forming a business where I´ll be living and doing the work in Argentina for US/European/Australian clients, and potentially adding on a handful of Argentinians to help with the work. I need to know where I should form this business, be it as an LLC in the US, or locally in Argentina using my wife´s name if necessary. I notice many websites geared toward expats have advertisements or postings by companies that specialize in taxes for expats, but I´m not yet at that point. I´m first looking for the basic information on how to best go about doing all of this.

Apologies if this got too long, but I figured I might as well ask here since I was going to ask anyway. Thanks again for the past advice and any future advice/information. I get the feeling I´ve stumbled across a good source of info for expats compared to some of the other sites I´m aware of.


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## Moulard (Feb 3, 2017)

Assuming you are self employed (or some form of unlimited liability structure and not operating under an incorporated structure) then you are also going to want to read through some of the self-employment and small business guides that are published. Pub 334 (Tax guide for small businesses) for one. The filing threshold for the self-employed is only $400 because of the social security tax implications so something to bear in mind.

You will likely be liable for US Social security taxes because there is no totalisation agreement between the US and Argentina (or Peru for that matter if that is where you are located at the moment).

While it might be handy have a US LLC to bill in USD and have your customers pay into a US account, there may be local business registration and tax considerations that need to be taken into account that you may not have thought about at this stage. You will also want to carefully determine if you would be legally allowed to operate a foreign business in Argentina, or whether you will also have to set up a business locally to comply with payroll, income tax withholding and other local tax obligations.

There are others on this forum who have far more experience on self employment and small business issues than I do.


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