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Taxes for Visa Holders Married in U.S
This article addresses the tax issues for visa holders who are married in the United States.
For those who hold a worker's visa (H-1, H-1B, L-1), being married allows you to file jointly with your spouse. This enables you to claim your spouse's personal exemption and also allows you to claim a double Standard Deduction ($10,400 for 2006). Further, filing jointly allows you to claim the Dependent Care Credit which is not available to you if you file separately.
To file jointly (or to claim your spouse as a dependent, something that will be discussed later), your spouse must have either a Social Security Number (SSN) or an Individual Tax Identification Number (ITIN). Any children will also need to have these numbers. Applying for a SSN requires a trip to the Social Security Administration's local office with the necessary documents. The details for this process can be found on www.ssa.gov. If it is determined that you are not eligible for a SSN, then you must apply for an ITIN using Form W-7. A recent change in IRS policy requires you apply for the ITIN only when you file your initial tax return. If the ITIN is needed for other legal purposes, the IRS should issue an ITIN earlier, but that is the exception, not the rule.
Form W-7 can be downloaded from the IRS website (www.irs.gov) and is relatively simple to fill out. A separate W-7 is needed for your spouse and each child. There are a number of documents that can be submitted with the W-7 to prove your identity, but the easiest document to provide is a notarized copy of your spouse's or child's passport. Making a copy of the passport is simple, and getting it notarized as a true copy can usually be done at a local bank. Some states, however, will not allow copies to be notarized. If you live in such a state (California is one such state), then you may need to go to go to the local consulate of your home country to get your passport copy certified as a true copy. As a last resort, you can actually send the passport with the W-7. Do not worry; it will be returned to you.
Once you have filled out the W-7, you attach it and the notarized passport photocopy to the completed tax return, leaving the SSN block on the form for your spouse and/or children blank, then mail the packet to the address in the W-7 instructions (requests for ITINs cannot be filed electronically). The IRS will evaluate the documents provided, issue the ITIN, fill in the ITIN in the blank SSN block(s), then process the return. You should receive your refund in about six weeks. The ITIN will be sent to your spouse (or to you for your children's ITINs) in separate correspondence.
For those who are in the United States under a F-1 or J-1 visa, the rules for filing tax returns are often decided on a case-by-case basis. While one person who is on a J-1 visa may be totally exempt from taxation, his next door neighbor on a J-1 visa may be liable for all the taxes that a H-1B visa holder must pay. The F-1 visa holder may be totally exempt from taxes or may only have to pay state and federal income taxes or may be liable for all the taxes that a H-1B visa holder must pay. Much depends on the nature and location of the work being done, the U.S. tax treaty with the home country (if one exists), the duration of your stay, and a number of other factors. Similarly, how your spouse is treated tax-wise is often a case-by-case situation. That said, we can give you some general guidelines as to how married couples with F-1 visa should file their tax returns.
The F-1 visa holder is considered a non-resident alien by the IRS and, if required to file a tax return, will normally file Form 1040NR and 1040NR-EZ. You cannot file this return jointly with your spouse. While residents of Mexico, Canada, Japan, South Korea and India can claim exemptions for the spouses and children as dependents, many F-1 visa holders cannot claim their spouse or children as dependents on their Form 1040NR/1040NR-EZ tax return, even if they are present in the U.S. with the visa holder. While this may not be fair, it is the law, and no one ever said the U.S. tax system was fair. There are exceptions to these rules, but they are too numerous to address in this article. We recommend that you post your situation in the F-1 forum and request specific guidance from one of our tax experts.
Please note that if you, as a F-1 visaholder, can claim your spouse and/or children as dependents, you must apply for an ITIN using the procedures noted earlier in this article.
I hope you have found this brief article informative. It is the one of many we will post to this forum to serve our guests. If you have any questions, as them in the GENERAL QUESTIONS, CONCERNS, ETC. section of the Taxes for F1 Students and those on OPT Section and let's discuss it.