I am having troubles when planning my tax return for 2010. Any comments and advices for me will be highly appreciated, thank you.
Here is my situation:
I am a U.S. Citizen. I have been resided and worked in a foreign country for many years. I qualified for the foreign earned income exclusion. To take advantage of the expiring 0% long-term capital gains tax rate, I will sell some of my U.S. stocks in 2010. I will also get marry with a foreigner in my workplace at the end of 2010, but I have no plan to apply Permanent Resident (Green Card) for her at this moment. (Therefore her status will be a non-resident alien of the U.S. right?)
My questions are:
1. To be qualified for a higher Tax Bracket, I would like to use Married Filing Jointly for 2010. Does my wife need a SSN / Tax ID when filing my return? How do I request one?
2. I know I have to include both of our foreign incomes in my filing. As I mentioned, I qualify for the foreign earned income exclusion, does my wife's foreign income qualify for the exclusion as well? (I read that only a U.S. citizen or a resident alien qualify for this)
3. My wife owns a U.S. Stock Account with a foreign stock broker. To be eligible for the U.S. Tax exemption, she filled out the W-8BEN form (entitled Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) upon opening the account few years ago. Is she still eligible for the U.S. Tax exemption after getting marry with me? The first line of the W-8BEN form states: "Do not use this form for a U.S. Citizen or other U.S. person, including a resident alien individual", she is not a U.S. Citizen nor a resident alien, but is she considered to be a U.S. person?

Thank you~~!

QUOTE,"I will also get marry with a foreigner in my workplace at the end of 2010, but I have no plan to apply Permanent Resident (Green Card) for her at this moment. (Therefore her status will be a non-resident alien of the U.S., right?)"---- Your spouse is ACTUALLY a resident alien( as she'll marry you, a US citizen), but she OFFICIALLY is not a resident alien( as you do not apply for a permanet residency at this time).

" To be qualified for a higher Tax Bracket, I would like to use Married Filing Jointly for 2010. Does my wife need a SSN / Tax ID when filing my return? How do I request one?"---- Get your foreign spouse either a social security number (SSN) or an individual taxpayer identification number (ITIN). While it is not necessary for a foreign spouse without any U.S. income to file at the IRS, you, as a U.S. citizen or permanent resident filing your return, can only claim her exemption if he or she has an ITIN.
You are able to claim exemptions for your foreign spouse only she had no gross income, is not filing a U.S. return or was a dependent of another taxpayer, you. This applies to cases where you and your spouse are both U.S. citizens or permanent residents or if either of the couple is a non-resident alien. Your spouse doesn't need an ITIN; the IRS issues ITINs to individuals who are not able to obtain a Social Security Number. Your spouse needs to file Form SS-5 to apply for her original Social Security card.
As you know, in general, Married Filing Jointly filing status provides more tax benefits than filing separate returns by providing you with the LOWEST tax bracket, NOT HIGHER TAX BRACKET.

" . . . does my wife's foreign income qualify for the exclusion as well? "---Yes. Exactly; Not only you but your spouse can claim her foreign earned income exclusion on her income overseas; BUT remember this; she must have been there for more than 330 days before becomin's a US resident alien( for instance, she was married to you Dec. 10 2010, then she has been there for more than 330 days( from Jan up to Dec 9 2010); Then she can file Form 2555 to claim her FITC. If not( she has not been in the foreign country for less than 330 days before her marriage, then instead, your spouse must use Form 1116 to claim the Foreign Tax Credit against the taxes paid on her foreign-sourced income.

"To be eligible for the U.S. Tax exemption, she filled out the W-8BEN form (entitled Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) "---No. W-8BEN is used to establish that your spose, the US stock holder that deserves dividend income from holding the stocks is NOT a US resident ( under either US Tax Code or US INS Rules). Now your spouse has become a US resident alien, So she doesn't need the form.


".. . She is not a U.S. Citizen nor a resident alien, but is she considered to be a U.S. person? ----- I can't tell you if she WILL be a US resident alien or not; it is up to you, your decision.

1. Attaché W-7 (ITIN application) with your joint tax return.
2. Joint return means that your spouse has agreed to be treated as resident of the U.S. Both must report worldwide income. Yes, she is eligible for earned income exclusion and/or foreign tax credit.