The tax filing deadline is April 18, so I have very clearly procrastinated on this despite knowing it would be more complicated. As with any and all Government-related processes we have experienced over the past several years, there are several forms involved and myriad instructions across various sources that I need to cross-reference. I'm currently suffering regret about the procrastination, as a result, but I think I should still be okay for time.
Colin was a Non-Resident Alien (NRA) of the U.S. from January 1, 2015 to June 25, 2015 -- obviously because he was still living in the UK during that time. But once he moved to the U.S. on June 26, 2015, he was considered "establishing presence" in the U.S. and thus building his status as a Resident Alien (RA). By the end of the year on December 31, 2015, Colin was considered an RA based on something called the Substantial Presence Test, which has some complex requirements...but basically, he surpassed a threshold of being physically present in the U.S. for a certain number of days within the year 2015 and also the past 3-year period. (If an NRA receives their green card within a tax filing year, they automatically qualify for RA status. Colin didn't receives his green card until 2016.)
All of that means that for the tax year 2015, Colin was both an NRA and an RA. People like Colin who fall within both the NRA and RA categories in a single tax year are allowed to choose how they want to be considered for tax filing purposes in that year, which means Colin can either file as a NRA (i.e., not file at all) or as an RA. RAs can either file individually or file jointly with their spouse. Based on everything I've read, it's more advantageous for K-1 couples to file jointly with the foreign spouse as an RA. However, spouses filing jointly when one spouse is an RA cannot electronically file their forms and must submit them by mail.
- Form 1040 (U.S. Individual Income Tax Return)
- Form 2555/2555-EZ (Foreign Earned Income Exclusion)
- Signed Statement of Nonresident Spouse Treated as a Resident for Tax Filing Purposes
FORM 1040
I cannot be bothered to manually fill out the Form 1040, so I'm currently using H&R Block online tax filing software to input and calculate all our individual income information. Unless I realize along the way that the software will not cover the level of complexity I need for this submission -- I have some small, painful suspicions that this might be the case -- I'll just print the final PDF for the mailed submission.
An additional complication for this part of the submission is the new requirement this year to provide the IRS information on your health insurance coverage under the Affordable Care Act (ACA). I was covered for the full 12 months of 2015, but Colin obviously was not, and I have to include a filing exemption for him based on the fact he was a foreigner and not eligible for coverage from January to July.
FORM 2555-EZ
Colin was not self-employed and didn't have other complicated earnings in the year 2015 while he was still living in the UK, so we can use the EZ version of the Foreign Earned Income Exclusion form for him instead of the long-form, regular Form 2555. This form title is surprisingly self-explanatory: it allows us to exclude any income Colin earned in a foreign country (i.e., the UK) from our U.S. income tax return file. I haven't delved too deeply into why that's advantageous, because I once again can't be bothered anymore, but I assume it prevents double-taxing by multiple countries and also allows us to exclude his foreign income in order to put our U.S. income in a lower tax bracket (meaning we get more money back in our refund).
SIGNED STATEMENT
The IRS requires that the spouses submit a joint, signed statement explaining that we have chosen to have Colin considered as an RA for the entire 2015 tax year, rather than an NRA, and how he qualifies for this status. We have to write the signed statement ourselves and attach it to the Form 1040. The only requirements they give for the content of the statement are:
- A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year, and that you choose to be treated as U.S. residents for the entire tax year
- The name, address, and identification number of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)
I'm still working through the forms and everything, but I have my fingers crossed that no new requirement pops out at me as I keep working.
