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frowns · Sep 27, 2009, 01:52 PM

I am a US Citizen who is married to a Japanese National. I live here in the US and she lives in Japan. We both work. I will be relocating to Japan in January 2010. With that said:

In comparing Married Filing Jointly vs. Married Filing Separately, it's in our best interest to file separately. However, after reading various posts and sources online, I am curious to know if I can claim my wife as a dependent. It seems the most important question asked in deciding if this exemption is possible is if my wife had any income. But is it referring to US income or worldwide income?

She did live/work in Japan and earned income. But since she's not a US citizen and we are not filing jointly, I don't know how the rules apply to her - it seems like they don't.

Also, if someone knows this - once relocated overseas, and working in Japan, would I still have to file a US State tax form? I know the IRS requires federal filing no matter where you live in the world, but I don't know how state tax would work, since I would not be living in any of the 50 states (I currently live in NJ - but once I move, the only thing I will have in the usa is a bank account in pnc bank branch in nj).

Thanks.

Five Rings · Sep 28, 2009, 09:40 AM

You may take an exemption for your wife as long as she had no US gross income or was not a dependent on someone else's US return.

A spouse is never a dependent.

You must apply for an ITIN (Form W-7) for her checking box (e) and filling in your name and number. When filing for 2009 enclose your return with your application for an ITIN and all required documents and send both your return and the W-7 it to the ITIN Operation.

Depending on how much you make in Jersey in January you may have to file partial year returns. In 2011 you will have no obligation to them unless you return to that state.

AtlantaTaxExpert · Sep 28, 2009, 12:57 PM

Five Rings:

While it is true that on a resident tax return, the spouse can never be a dependent, on some non-resident returns, the spouse IS claimed as a dependent.

Five Rings · Sep 28, 2009, 01:42 PM

Well not precisely.

A spouse can never be claimed as a dependent because they cannot meet the tests.

In some circumstances you may enter the spouse in the dependents line and write spouse and then check "dependents on 7c not entered above" but that is merely a bookkeeping accommodation to the IRS. A spouse can never be a dependent.