[confusedExpat]

Hello,

I am an American citizen and have been living in Brazil for the last 3 1/2 years doing my master's degree which I just finished at the end of February. I earned the equivalent of only 648 USD per month from my govt scholarship, which comes out to $7776 a year. I received the scholarship money for two years from April 2010 to March 2012. This income is not taxable in Brazil and I have never filed Brazilian income taxes since I never needed to. I have also never filed American income taxes before since I never made enough money to have to do so.

Last year, I married a Brazilian woman. Therefore, my filing status would change from single to married filing jointly or separately. If I choose to file jointly, my wife who is a nonresident alien would be considered a resident of the US for tax purposes and her income (she makes double what I make) would be taxed by the US. So, it would make more sense to file separately. Based on Publication 501, anyone filing separately who makes at least $3700 (which I do) would have to file (see Table 1):

http://www.irs.gov/pub/irs-pdf/p501.pdf

However, I would need to apply for an ITIN number for my wife so that I can declare her as my spouse on my tax return. The problem is that she already has an immigration visa and we are going to move to the US in a month and a half on June 4 of this year. They warn you on the W7 form (the ITIN application form) that you should NOT apply for an ITIN if you have a SSN or are eligible to get one. My wife will get a SSN one since she elected to automatically apply for one on one of the forms we filled out, though I think that bureaucractic process will begin one enter into the US. I do not want to do anything tax-wise that could mess up her immigration status or cause problems for her in the US.

I luckily have until June 17 this year to file my taxes since I have lived in Brazil for at least 330 days over the past year and thus qualify automatically for the two month extension.

I've already done some research on the subject, including several hours on the phone with the IRS, but I'm still not really sure what to do. I could really use some expert advice.

Any advice would be greatly appreciated!

Thank you,

Peter

[AtlantaTaxExpert]

Peter:

There is an EASY solution to your problem. Submit the Married Filing Separately tax return with your wife's name on the return, and neatly print "NRA" (for non-resident alien) where her SSN would go.

Then MAIL the return to the IRS center in Austin, Texas; the full address is below:

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
AUSTIN, TX 73301
USA

If you have a U.S. bank account, be sure to insert the bank numbers on the return so the refund will be direct deposited.

This is perfectly legal and the process is spelled out in IRS Pub 17. However, such returns CANNOT be efiled, so the process is NOT commonly known.

[confusedExpat]

Excellent! I love easy answers!

I still have a few questions (I've never filed taxes before, so please bear with me):

• I'm supposed to use the 1040 form, right?
• How do I show my measly income since I don't have a W2? The best I could do would be something from the university showing how much they paid me or perhaps the deposits that were made in my account. (I'm also assuming I would have to get a sworn translation for any docs in Portuguese as is usually the case.)

Thank you very much!

[AtlantaTaxExpert]

Yes, use Form 1040.

Just list the income in U.S. dollars on Line #7 of the Form 1040.

Note that if you made LESS than $3,700, you have NO LEGAL REQUIREMENT to file.

[confusedExpat]

Okay. It seems strange that I don't have to attach any documents showing how much I made. How will they even know if I made more or less than the cutoff or if I would even have to file or not?

Thank you!

[AtlantaTaxExpert]

They will not HAVE any paper trail, and it IS possible they will ask for proof of income, but you need provide NOTHING with the original filing.

These type of returns are filed from overseas locations all of the time.

[confusedExpat]

Okay, cool. I was able to get a paper from the government agency that gives me my scholarship. I'll send that along even though it's in Portuguese just to have something.

The only thing I'm still confused about is the refund. You mentioned I should include my American bank account info for the refund. As far as I can tell, I wouldn't pay anything or get any money back... How could I possibly get a refund?

Thanks very much. You've been a big help.

[AtlantaTaxExpert]

In years past, refunds were available in the forms of Recovery Rebate Credits (for 2008) and the Making Work Pay Credit (for 2009 and 2010).

However, there are NO such credits for 2011, so I suppose sending your bank information is NOT required.