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marylaheye · Jan 13, 2007, 01:23 PM

Hi,

I am an American, currently living in Belgium. My husband is Belgian and is retired from his job here in Belgian for which taxes are taken out here. I have searched and searched but have been unable to find an answer to my tax question. Can I file as single since my situation does not fall into any married category? I am also retired and only draw a small monthly retirement and also social security. I do not think that I even have to file a return since my retirement falls under the amount required to file (8200) for tax year 2005. It also states that social security benefits do not count unless married and filing a separate return. Since my spouse does not live or work in the States, he has never or will not file income tax in the States. Can I file as single since all other categories imply that spouse is working and living in the States??

AtlantaTaxExpert · Jan 13, 2007, 03:15 PM

If you are legally married, your only option to to file Married Filing Separately or Married Filing Jointly.

If you opt to file Married Filing Jointly, your husband's income will be subject to U.S. income tax, though you can offset any tax due by claiming either the Foreign Income Exclusion or the Foreign Tax Credit. Not a real good option In my opinion!

How much is your Social Security benefit? It may not make a difference how you file.

marylaheye · Jan 13, 2007, 04:42 PM

Originally Posted by AtlantaTaxExpert

If you are legally married, your only option to to file Married Filing Separately or Married Filing Jointly.

If you opt to file Married Filing Jointly, your husband's income will be subject to U.S. income tax, though you can offset any tax due by claiming either the Foreign Income Exclusion or the Foreign Tax Credit. Not a real good option IMHO!

How much is your Social Security benefit? It may not make a difference how you file.

SS benefit is 917.00 per month. Problem is that in all ways of filing 'married', they say that you HAVE TO PROVIDE spouse's SSN, and my husband does not have one. I took a lump sum in 2003 when I took early retirement, so my monthly retirement is not even 400.00. I wonder if I even have to file. My social security retirement did not kick in until the middle of 2004, so I did not even file for year 2004. I did file for 2003 since that was the last year that I worked. We are in the process of applying for my husbands permanent visa at the Brussel's American embassy and one of the things that I have to provide is my past 3 year's tax returns. We have been living in Belgium since October 2003 and both of us are retired. We plan on relocating to the States in the Spring of this year. I did not think that I had to file for 2005 either. I either assumed that my yearly retirement pay was not even enough to file, or I got bad advice from someone who had told me that I did not have to file. And, I also thought that I did not have to pay tax on my social security. HELP!!

AtlantaTaxExpert · Jan 13, 2007, 06:03 PM

Assuming an annual pension of $4,800 and SS benefits of $11,004 ($917 X 12), you would owe $538 for 2005 if you filed separately.

Assuming an annual pension of $4,800 and SS benefits of $5,502 ($917 X 6), you would owe about $129 for 2004 if you filed separately.

What is your husband's annual pension income? If it's $11,850 or less, you could file jointly and STILL owe nothing.

You would have to apply for an Individual Tax Identification Number (ITIN) for your husband, but that's not too hard. All you need is to fill out a Form W-7, get a notarized photocopy of his passport and mail both with your tax returns.

marylaheye · Jan 13, 2007, 10:11 PM

Originally Posted by AtlantaTaxExpert

Assuming an annual pension of $4,800 and SS benefits of $11,004 ($917 X 12), you would owe $538 for 2005 if you filed separately.

Assuming an annual pension of $4,800 and SS benefits of $5,502 ($917 X 6), you would owe about $129 for 2004 if you filed separately.

What is your husband's annual pension income?? If it's $11,850 or less, you could file jointly and STILL owe nothing.

You would have to apply for an Individual Tax Identification Number (ITIN) for your husband, but that's not too hard. All you need is to fill out a Form W-7, get a notarized photocopy of his passport and mail both with your tax returns.

Thanks for your help. Husband's pension income is more. One more question though please. I'm looking at the worksheet for year 2005 1040 form for lines 16a and 16b. Question is for number 2 (Enter your cost in the plan at the annuity starting date.) What does that mean? What cost? My retirement is with ERS.

AtlantaTaxExpert · Jan 14, 2007, 10:27 AM

Some pension plans or annuities are funded with money on which taxes have already been paid. If some of the money funding the pension plan has already been taxed, it should not be taxed a second time when the distribution is made. That's why they ask for the cost on Line 16b.

If you need professional tax help, I am available. If interested, contact me at [email protected].