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Trek · Feb 21, 2015, 06:41 PM

Aug 2013 I came USA with H-1B with my wife and daughter (child) with H4 visa.
In 2014 my wife had to return to our home country (Mexico) and continued working there and only short visits to US.

I waited until Jun/2014 for my child to meet the Substantial Presence Test to file jointly and claim my child, then submitted the W-7s and 1040A tax return for 2013.
Couple of weeks later I received ITINs for my wife and child and then the refund.

Now for 2014,
If my wife was 240 days in Mexico and working there, can we file jointly again as residents and now file electronically online?

My wife makes a small-to-medium income, should we include Forms 1116 and 2555 for my wife income & tax from Mexico? And should we need some papers from Mexico that shows the foreign income & tax numbers? Now she has the payment vouchers that can be added to get the year totals.

Then the attached Form 1116 in the name field should it include both names, or just my wife name?
The TaxAct application adds both names and only my SSN.

AtlantaTaxExpert · Feb 21, 2015, 06:48 PM

You can file jointly with your wife for 2014 irrespective of where she is located. She could be on Mars for all the IRS cares. You just need to include her Mexican income.

Yes, you can file Form 1116 to claim the Foreign Tax Credit, but you might find using Form 2555 to be better tax-wise, because then you EXCLUDE her earned income after it is declared on Line #7 of Form 1040.

No need to send in the vouchers. The IRS will ask for them if they want verification of her income.

If you need professional help to file this return, please email me at the email address in my profile.

Trek · Feb 22, 2015, 11:58 AM

I see the benefit with the Form 2555, but should we also include Form 1116?

Thanks

Edit: Ah, if the foreign earned income is lower than $99,200 then no reson to add 1116
Is this correct?

AtlantaTaxExpert · Feb 22, 2015, 04:10 PM

Yes, that is correct. Form 1116 is NOT needed IF income is below $92K.