Should I file my taxes as "married/separately" or as "married/joint"? I started doing my taxes today and it seems like you get penalized on several items for filing taxes separately.
Other - Taxes - 2 Answers
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1 :
She may not be liable for federal tax but I would have thought she was liable for state taxes. File as two dependents (you and your wife) and see what Auntie IRS, what's the worse they can do, say you got wrong. Might be an idea to make enquiries first or do it online, that way you can blame the computer.
2 :
If you file as "married filing jointly", then the U.S. will tax all of her income as though she was living in the U.S., except for any income specifically exempted by law or tax treaty. See if it will be possible for her to claim a tax credit in Canada for tax paid to the U.S. Also, see if how much of her income is or is not exempted by law or treaty. Figure out the taxes both ways, filing jointly and filing separately. See if filing jointly results in more of her income being taxed, and whether this is worse than filing separately would be.
