Hi, I am a US citizen married (in Dec. 2010) to a nonresident alien who has been in the States under J1 visa for 2 years. Her income was not subject to taxes because of a tax treaty. Do I understand correctly that if we file a joint 2010 return, her 2010 income would become taxable? If yes, is there a better way to file our returns?
Thank you very much.

That would dependent on the treaty. If the treaty text has an "exception to the saving clause", she could still claim the treaty exemption as a resident alien.

Thank you very much for your response!