I am a U.S. citizen residing in Thailand. In 2009 I married a Thai citizen who lives with me. I would like to file a 2009 U.S. tax return as married filing jointly in hopes that my wife's minimal income will reduce my tax burden. I understand that we can do this if she requests that she be treated as a U.S. resident for tax purposes. Is this correct? If this is correct, then if she requests to be treated a U.S. residence for tax purposes does this have any effect on my (not hers) Foreign Earned Income Exclusion? Does this mean that she cannot use the Foreign Income Exclusion since she is being treated as a U.S. resident for tax purposes (which is no problem as her income is minimal) but I still can? I am confused between her being treated as a U.S. resident in order to file jointly, yet we will live outside the U.S. and if this has any effect on my Foreign Earned Income Exclusion? Thanks in advance for any help!

Yes, that is correct. She must sign a statement that she CHOOSES to be treated as a resident alien for all of 2009.

No, it will have NO effect on your Forein Income Exclusion.

She will also be able to claim the Foreign Income Exclusion.

The concept is simple: Married couples who are U.S. residents for tax purposes are allowed to file jointly irrespective of their physical location.