Married Filing Jointly?

[jlcl]

What is the name of your state? California

I am a US citizen and my husband is a foreign citizen (he gave up his green card in 2004) and we currently are retired and live overseas now but we have rental income from our house in the US, do we file Married Filing Jointly for 2005 for 1040? Or, do we need to file as non-resident alien? Thanks.

[LdiJ]

Originally Posted by jlcl

What is the name of your state? California

I am a US citizen and my husband is a foreign citizen (he gave up his green card in 2004) and we currently are retired and live overseas now but we have rental income from our house in the US, do we file Married Filing Jointly for 2005 for 1040? Or, do we need to file as non-resident alien? Thanks.

If your husband gave up his green card in 2004, then he is no longer subject to US income tax on his world wide earnings. Therefore, it may be better for you to file a separate return to declare that income. Otherwise, you would have to elect for him to be treated as a US resident, which would subject his world wide income to US tax.

[jlcl]

If we want to file married filing jointly, what form do we file to elect to treat my husband as a US resident for tax purpose? He has no other worldwide income other than our US rental property.

[efflandt]

In order for you to file with him, he would likely need an individual taxpayer identification number (ITIN) if he does not already have that or SS number. See [url]http://www.irs.gov/businesses/small/international/article/0,,id=96696,00.html[/url]

I don't know the rest of the details of what form(s) you need for rental income. But if you can figure that out, you could fill out the forms jointly and separately to see which would result in less tax.

[LdiJ]

How much income did you actually receive from the rental property?

[abezon]

As a citizen, you cannot file a nonresident return.

Hubby will use his old social security number. Your options include:
File a joint 1040. Attach an election listing both parties' SSNs, names, addresses, that the elect to file jointly on worldwide income, & have not revoked a previous election. He must then file a US tax return every year. Report all income, claim a foreign tax credit for foreign income on the 1040, claim a FTC for the US tax paid on US-source income on your residence country's return.

File separately. You get a standard $5150 deduction, and can claim personal exemptions for yourself & your spouse of $6600. Unless taxable income exceeds $11,750, you pay no taxes. CAVEAT: If you are receiving social security, check the tax treaty with the country you're living in -- it should address whether social security payments are taxed by the source country or residence country. If it's source country, 85% of your social security benefits will be taxable on your 1040. Hubby's SS payments would be taxed at nonresident rates.

Head of household. If you have a qualifying child or qualifying relative living with you, you can file head of household, which eliminates the taxable social security problem. The difficulty is that the QC or QR has to be eligible to be a US dependent (US citizen or resident of the US/Canada/Mexico).

Where do you live??