Whether your entire year is spent in the US or your only connection to the…
When it’s time to file U.S. taxes with your Colombian spouse, it’s understandable you have many questions. While you may be aware there are particular tax benefits to marriage or having children, the nuances around the topic are buried in pages of legal jargon.
One of the main concerns we receive is that U.S. citizens who have recently married a non-U.S. citizen are often unsure whether the Internal Revenue Service (IRS) recognizes their marriage.
In this complete guide for filing U.S. taxes with your Colombian spouse, we’ll explain the following:
1. How the IRS, if you were married in the U.S. or abroad, evaluates the legality of your marriage.
This also includes same-sex marriages.
2. The filing options you have now that you’re married.
3. Essential prerequisites for your Colombian spouse to complete before filing.
4. In addition, the process of correcting a previously filed return.
5. And most importantly, how to file your income tax return confidently!
1. Evaluating Your Marriage’s Legality
First, before we begin discussing filing options for your and your spouse or partner, you need to first evaluate the legality of your marriage. In this section, we review if:
1. The marriage took place in the U.S.
2. If the marriage took place in another country (like Colombia)
3. And the law for same-sex marriages
Marriage Within the U.S. With a Colombian Spouse
A marriage recognized by a state, territory, or possession within the United States is also recognized by the IRS. A marriage is generally recorded at the county level where the marriage license was granted but is recognized country-wide.
For example, a U.S. citizen and a Colombian— who’s not a U.S. citizen— are married in Huntington Beach, California. That marriage license would be recorded by the Orange County Clerk-Recorder, the county within California where Huntington Beach is located, and that marriage will be recognized throughout the country.
Marriage Abroad and With a Colombian Spouse
Federal tax law considers a change in a U.S. taxpayer’s status— from single to married— when their marriage is recognized by the foreign country where it took place.
In Colombia, for example, newlyweds will find themselves at one of many “notarias”; (or notaries, in English) sharing vows and signing paperwork. When a marriage is recognized in another country, the marriage is automatically recognized by the U.S. as well.
For couples who are uncertain about the legality of their marriage, the U.S. embassy or consulate is a good place to start. However, ultimately, the Attorney General’s office or consulting an attorney should have the definitive answers to any questions surrounding a marriage’s validity.
Marriage for Same-Sex Couples
Marriage between a same-sex couple is treated the same as any other marriage in the U.S. Colombia has recognized same-sex marriages since 2016 and deemed it unconstitutional to treat these unions differently. Colombia also has recognized de facto unions since 2007. However, marriages between same-sex couples are still not recognized in a number of countries.
2. Filing Options Once You’re Married
Once you’re able to confirm the legality of your marriage, you can then think about the different options you have for filing. In this section we cover:
1. When the tax year begins for you and your non-U.S. citizen partner.
2. The filing status for you and your non-U.S. citizen partner.
3. The options of married-filing-jointly vs. married-filing-separately.
4. Clearing up the confusion around filing as “head-of-household”.
Tax Year for Married Couples
The IRS recognizes a marriage to be valid for the entirety of the year, regardless of the date the marriage occurred. So, for example, a couple who married on January 1st and stays married for the next 364 days is treated the same as a couple who married on New Year’s Eve, December 31st.
Filing Status for Married Couples
For the majority of Americans who have a non-U.S.-citizen or Colombian spouse, the choice is between filing a joint or separate tax return. However, those who are married are prohibited from filing “single”
So regardless of immigration status, the IRS will recognize your Colombian spouse as a U.S. resident, specifically for tax purposes. The vast majority of my clients have seen a sizable reduction in their tax bills or a substantial increase in their tax refunds when they elect to file jointly (MFJ) with their spouse.
Married-Filing-Jointly VS. Married-Filing-Separately
When determining your filing status, the IRS requires your relationship status to fit into one of two categories: married or unmarried. The pros and cons of each filing status can easily be misunderstood; below is a simple breakdown of filing options.
Those who opt for the married-filing-jointly (MFJ) route will almost always pay less in taxes. However, the drawback is that there are extra steps and paperwork needed to obtain an individual taxpayer identification number (ITIN) for your spouse, which includes providing in-person or mailing original documents (i.e. passport), as well as filing your initial tax return by mail.
Notably, if the nonresident spouse received income during the tax year, that income, wherever it’s made, must be included when filing MFJ. However, the result of including available deductions, credits, and being in a lower tax bracket combined with the possibility of excluding foreign earned income and (or) offsetting U.S. taxes dollar-for-dollar with the Foreign Tax Credit can have a significant positive impact for most U.S. taxpayers.
The other alternative for married couples is to file separately, which is the most convenient option. The benefit is that you can skip the ITIN process and there is no paper filing requirement the first year. Also, it may also make sense if one spouse has a significantly higher income and (or) the other spouse may potentially have a significant amount of itemized deductions.
However, for most married couples, the MFJ route is still the better options because married-filing- separately does come at a higher cost. You will not be able to take advantage of potential tax credits and deductions, and most likely will have to pay higher taxes.
I encourage anyone who is married and considering filing separately to consult me first. Again, the MFJ route for a U.S. expat married to a Colombian spouse yields a better financial outcome.
When does filing as Head-Of-Household become relevant?
Eligibility to file for head of household (HOH) is a commonly confusing term for many folks, and the rhetoric of the term doesn't help its cause.
To claim head-of-household status, you have to be considered unmarried and have a qualifying person in your same household, such as a dependent child or parent (not a spouse), for at least half the year and finance the dependent’s living arrangements. Further, you must pay 50% or more of the household expenses.
There are cases where you can be married to a foreign non-resident alien (NRA) and still be considered unmarried for HOH filing purposes if you live with and take care of a child or parent.
3. Essential Prerequisites for Your Colombian Spouse Before Filing
To begin the filing process, there are essential prerequisites you and your Colombian spouse will need to complete.
In this section, we’ll cover:
1. TIN vs. SSN vs. ITIN.
2. How to determine if your Colombian spouse needs an ITIN.
3. How to apply for an ITIN.
4. Checklist of documents for married-filing-jointly.
5. Services offered by USATax.co.
TIN vs. SSN vs. ITIN
There are three acronyms to be aware of: TIN, SSN, and ITIN. A valid TIN (Taxpayer Identification Number) must be included for the IRS to accept a tax return. A person’s SSN (social security number) and TIN are one and the same for U.S. citizens.
For those who are not eligible for an SSN but still need a TIN, they are eligible for an ITIN, an Individual Taxpayer Identification Number. The IRS issues ITINs to facilitate the filing process for those without social security numbers. People who aren’t eligible for social security numbers are typically noncitizens who are not authorized to work in the U.S. and undocumented immigrants, the former of which wouldn’t be permitted to legally work either.
Do I need an ITIN?
You may need an ITIN if the following applies to you:
● You are the dependent or spouse of a U.S. citizen, U.S. resident, or nonresident visa holder.
● You are not eligible for an SSN and are required to file a tax return.
● You are a nonresident required to file a tax return. For example: You are a U.S. resident (based on the number of days you spent inside the U.S.) and are required to file a U.S. tax return.
I don’t have an ITIN. How do I apply?
You can apply for an ITIN from the IRS when you submit your tax return. However, before applying, I would strongly recommend consulting with me first, as I can provide guidance and assurance throughout an often stressful process. I provide more details about our services below.
4. Correcting a Previously Filed Tax Return
If you’re reading this article and realized you may have made a mistake in your tax filing, don’t worry! The IRS does allow for amendments for the last three years of filings, or if you paid tax or received a refund, up to two years after filing. The three-year period starts on the tax filing deadline of the year of the return.
If you think you may need to amend your taxes, please contact us for a consultation and we can do a full evaluation of your case. It is possible to amend your tax return from single to married-filing-jointly or married-filing-separately. There is also a possibility of amending a previous marriage-filing-separately return to a MFJ return. If you do need to complete a fully amended tax return, our team will be able to help you.
5. USATax.Co Solution For Tax Filing With Your Colombian Spouse
The team at USATax.co walk our clients through every step of the tax filing process. From determining marriage legality, choosing the best filing option, and to filing for an ITIN, we erase the stress of filing!
For example, when it comes to filing for an ITIN, our process is smooth and simple because Jeffrey B.
Shurtleff, MBA EA, is a Certified Acceptance Agent (CAA) authorized by the IRS. CAAs are specially
approved to file ITIN applications for alien individuals who aren’t eligible for social security numbers.
And a huge bonus for working with a CAA is that you only have to mail your passport to us for a short period of time. If you apply for an ITIN when you file your taxes directly with the IRS, they can keep your passport up to 14 weeks.
When you work with us to file taxes and apply for an ITIN, every step is transparent:
1. First, we double check your eligibility for an ITIN and if eligible, we ask that you send in your
passport and other information so we can then confirm your identity during a video call.
2. Second, we prepare your W-7 form, which is the application for an ITIN.
3. We will then prepare the tax return and a MFJ Declaration.
4. Finally, we’ll gather all other necessary tax filing documents, proof of identity, and foreign status
and file your paper taxes for you.
5. We ship your passport back to you, along with a paper tax return that you must mail to the IRS.
We understand that while this article is helpful, there is also a lot of information to remember! If you’re ready to work with professional and experienced tax accountants to file your U.S. taxes with your Colombian spouse, here is a convenient checklist of what you’ll need:
1. Marital Documents
2. Proof of identity and foreign status (passport)
3. Prior year tax forms from USA or Colombia
4. All supporting documents for income, either wage, investment, or passive income
5. Bank statements where applicable
At USATax.co, we are licensed and experienced tax accountants who are specialized in filing U.S. taxes for expats in Colombia. We are conveniently located in Medellin near Parque lleras and we provide services to clients all over the country. We are here to support you with your requirements for this year’s tax return and any other questions you may have. Please contact us today!
Frequently Asked Questions
Does the IRS recognize my marriage if:
● I married a non-U.S. citizen in the U.S.?
● I married a non-U.S. citizen abroad?
In most cases, a marriage in another country is valid for tax purposes. However, some situations can be highly nuanced, which is when the help of a professional is recommended.
When does my filing status change from single to married?
Individuals who marry anytime within a calendar year are considered married for the entirety of the year for tax purposes. Therefore, the next time you file taxes is when your filing status changes.
How are marriages of same-sex couples treated abroad?
In many countries, marriages of same-sex couples are treated the same as any other heteronormative couple, including Colombia, Australia, Germany, Canada, Denmark, Argentina, Belgium, France, and more. However, many marriages between same-sex couples are not recognized or legal.
The IRS considers me to be married, what are my filing options?
Individuals who are married with a living spouse can either file as Married-Filing-Jointly (MFJ) or as
Married-Filing-Separately. In some cases where you live with another qualifying household member, like a child or parent, you may be able to to file as Head of Household when married to an non-resident alien (NRA).
What happens if I’m married but file as if I’m single?
Knowingly filing the wrong status could be considered fraud, which is a crime and subject to serious
penalties. Please do not do this. You could face civil and criminal penalties with fines up to $250,000.