U.S. EXPAT TAX GUIDE โ MEXICO
Do I need to include my non-US spouse on my US tax return?
In most cases, you donโt need to include your non-US spouseโs income on your US tax return if theyโre not a US citizen or Green Card holder, and they donโt earn US-based income.ย
However, youโll still need to list their nameโan SSN or ITIN isnโt required unless youโre filing jointly.
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How should I report joint bank accounts with my non-US spouse?
If you have a joint account with your non-US spouse, you must report it on your FBAR if the total balance of all foreign accounts exceeds US$10,000 at any point in the year. The FBAR is used to report foreign accounts for transparency, so if you have signature authority, you must declare it.
Do I need to report my non-US spouseโs personal accounts on the FBAR?
No, youโre only required to report accounts you have control over. If your spouseโs accounts are in their name alone, they donโt need to be reported on your FBAR.
Is my non-US spouse in Mexico required to pay US taxes?
If you file as Married Filing Jointly, your non-US spouse’s global income becomes subject to US tax. If you choose Married Filing Separately, only your income is subject to US tax, leaving your spouseโs income untaxed in the US, but still taxed in Mexico.
What happens if I have control over my childโs foreign bank account?
If you have control or signature authority over your childโs foreign bank account, you need to report this on your FBAR, regardless of your childโs citizenship. This is required for any foreign accounts you have control over, even those that arenโt yours directly.
Why is it important to correctly report FBAR accounts?
Accurate FBAR filing is essential to avoid hefty penalties and potential legal issues. Penalties for not filing can be significant, including fines and potential criminal charges for intentionally avoiding FBAR reporting. Ensuring all accounts are properly declared is key to staying compliant with US tax law.
How do I file an FBAR?
To file an FBAR, you must do it electronically through the FinCEN website by April 15, with an automatic extension to October 15.ย
Remember to report any foreign financial accounts where your total balance exceeds US$10,000, including bank, investment, and even joint accounts. Late filing can result in hefty penalties, so itโs essential to meet the deadlines.
What happens to your US tax return if youโre married to a non-US spouse?
If youโre married to a non-US citizen, your filing status can influence your tax benefits. Normally, youโll file as married filing separately, but you could choose to treat your spouse as a US tax resident. This decision will affect eligibility for certain deductions and tax credits, so itโs crucial to review this with a tax advisor.
Whatโs the process for getting an ITIN for your non-US spouse?
If your non-US spouse doesnโt have a Social Security Number, youโll need an ITIN (Individual Taxpayer Identification Number). Hereโs how you can get it:
- Step 1: Fill out Form W-7, including all necessary personal details.
- Step 2: Provide supporting documents (e.g., passport, birth certificate) proving identity and foreign status.
- Step 3: Attach the W-7 and documents to your tax return.
- Step 4: Mail everything to the IRS or visit an authorized IRS office. It takes around 7-11 weeks to process the application.
What if the ITIN for your spouse expired?
If your spouse already has an ITIN thatโs expired, renewal is necessary. Simply fill out Form W-7 again with updated documents and submit it to the IRS. This renewal will ensure your spouse can be included in your tax filing.
How can a tax professional assist with international tax concerns?
Navigating taxes as an expat can be tricky, especially with issues like FBAR filings and dealing with non-US spouses. A tax professional with international expertise can help ensure compliance, avoid mistakes, and find the best tax strategies for your situation.
Why partner with a specialist Expat accountant?
Living outside of the US can make your tax filing requirements complicated. To ensure you pay the minimum amount of taxes, it’s critical to work with an accountant who understands every aspect and avenue for reducing your tax liability. We have a dedicated team of tax accountants who work exclusively with US expats earning and investing in Germany. Partnering with a specialist expat accountant can help you navigate complex tax regulations and optimize your tax situation.