I need to file my 2015 taxes. I got married in 2015. My wife is from India and she owns a business in India. She moved to US in August 2015. Do I need to report the income she earned in India in 2015 before she moved here?

If you file a JOINT tax return for 2015, then ALL world-wide income earned by BOTH spouses is subject to U.S. income tax. That income tax can be mitigated by claiming the Foreign Tax Credit (Form 1116) for income taxes paid to India.

Further, her self-employed business income will also be subject to self-employment tax at 15.3%. This is separate from the income taxes assessed.

As an alternative, you can file a Married Filing Separately return, in which case NONE of her Indian income will be subject to U.S. taxes (income or self-employment), and, if she has NO U.S.-sourced income in 2015, you can claim her personal exemption on this return.

You should model your return BOTH ways to determine which is best.

If you need professional help in this matter, email me at the email address in my profile.

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