1. Yes.
2. See below
3 & 4. Wait until you get your wife's ITIN, then you can efile the Colorado return. You have until 15 Oct 14 to efile the Colorado return.
It is probably most advantageous for you to file jointly with your wife, filing Form 1040 with Form 1116 to claim the Foreign Tax Credit. Form 1116 is required because you must claim ALL world-wide income earned in 2013, and the Form 1116 allows you to claim a credit for the income taxes paid to your home country.
You will need to apply for an Individual Tax Identification Number (ITIN) for your wife by submitting Form W-7, and that process underwent some
radical procedural changes in 2013. Instead of the simple notarization process, the IRS now requires that your home country
certify the photocopy of your passport
as a true copy. This is due to rampant fraud in the ITIN submission process. The notaries simply cannot tell the difference between a fake passport and the genuine passport.
FIRST ALTERNATIVE: This certification can be done by the home country embassy in Washington, D.C. or at one of the consulates across the country. Assuming you do NOT want to drive there, you need to call the nearest consulate and arrange to have this process done via the mail. This process, done via mail, can take up to three months to complete.
SECOND ALTERNATIVE: The IRS also have Tax Assistance Centers through which you may be able to have the passport verified as genuine, then submit the tax return and Form W-7 IN PERSON to be forwarded to the ITIN Processing Center in Austin, Texas for processing, without having to get the photocopies certified by your home country consulate.
You go to the TAC with your wife, her passport, the SIGNED Forms W-7, and the completed and SIGNED tax return.
The IRS official verifies the passports, asks a few questions, completes the certification paperwork, checks the Forms W-7 and tax return, then returns the passports with a receipt for the tax return and Forms W-7, which is sent to Austin, Texas for processing.
You leave the TAC with your wife and/or family, the passports and a receipt for the Forms W-7 and the tax return.
You would get the ITIN about six weeks after you left the TAC.
The tax returns are NOT processed at Austin, Texas, but rather forwarded to the regional IRS centers for processing, so the refund will come about one month AFTER you get the ITIN letters.
The list of the TACs are at the link below:
Taxpayer Assistance Center Locations Where In-Person Document Verification is Provided
THIRD ALTERNATIVE. I am a Certifying Acceptance Agent, and I can certify the passport if the TACs are not close.
You would mail the passport and the SIGNED Form W-7 and SIGNED tax return to me. I would contact you via SKYPE, conduct a brief interview with your spouse, certify the passport, attach the certification to the SIGNED W-7 and sign both documents. I would also sign the tax return, then paperclip the W-7 with certification to the tax return, and then mail them to the IRS ITIN Processing Center in Austin, Texas.
The passport I would mail BACK to you via tracked PRIORITY MAIL, so the passport would be out of your possession for about a week.
The
FINAL alternative is to mail in the actual passports themselves, something most of my clients are reluctant to do because...
If the IRS gets the passport, they hold it for about TWO months.
If you need my professional help, please email me at the email address in my profile.