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US Income Tax and ITINs

What happens to your taxes when you get married? There are a few things to consider when paying taxes or claiming foreign spouses as beneficiaries.

Taxes for Nonresident Aliens

For foreign spouse that do not live in the US and are not American citizens or permanent residents, there are two choices (Source):

Choice 1. Treat spouse as resident alien

  • Get a higher tax deduction (married, filing jointly).
  • Need to pay taxes on spouse's income.
  • Need a Social Security Number (SSN) (use form SS-5 to apply at a US embassy) or Individual Taxpayer Identification Number (ITIN) (attach Form W-7 to return).
  • Include a statement with the tax return declaring your intention to be treated as US resident for the tax year.

Choice 2. Treat spouse as a nonresident alien

  • Easier to do (married, filing separately).
  • Choice to claim an exemption if there is no US income and is not a US dependent, but need an ITIN.
  • Choice to use Head of Household Status if there are US citizen children for better tax rates and deductions (IRS Publication 17).
If the spouse has a green card or is a resident alien, then they need to file taxes and must file the FBAR foreign bank account report with the Department of Treasury. However, they can use the foreign income exemption to avoid paying taxes on foreign income.

Obtaining an ITIN

See the IRS website.

ITIN Issuance

Those that do not need an ITIN may not be issued one, and ITINs expire in five years (Source).

Beneficiaries

ITINs are necessary for tax payment for beneficiaries, but are not necessary for listing them as beneficiaries (Source).