Ah, marriage! It can be such a joy. My husband was lucky enough to be advised by Arnold to marry me. I’ve always said Arnold gives great advice! Now Marriage and US tax return. My name is Christie DuChateau and I am a US tax expert.
Marriage and US tax return
Getting married as a US citizen in The Netherlands? You need to be aware of how this will affect your taxes. Here are the top questions to consider when you get married:
Will you file jointly or separately from your spouse?
If you are a US citizen marrying a US citizen, you can choose whether to file jointly or separately. Filing jointly has some advantages such as taking advantage of credits which may be unavailable if you file separately, and using your spouse’s Dutch income taxes paid to credit your joint US income taxes. It may also be cheaper because you do not have to pay twice for tax preparation services.
If you are a US citizen marrying a non-US citizen (or Green Card holder), you can also choose to file jointly, or choose the option of married filing separately. Most will choose married filing separately. The reason for this is if you choose to file jointly your non-US spouse must report all of their worldwide income.
Which Dutch or other non-American person wants to report their income to the US? Not many! But you may choose to file jointly if your spouse wants to apply for a green card in the near future or if you want to establish higher income for the purpose of buying US property, for example. Filing separately does not automatically mean your non-US spouse must also file; it just means that you will complete your requirement separate from your spouse.
Will my non-US spouse have to report anything to the US?
When you choose to file separately then the non-US spouse does not have a US filing requirement and does not report their income. But that does not mean they stay completely out of the IRS crosshairs.
When you have a joint bank account with your spouse, you may need to report that bank account on the FinCEN 114 (FBAR) form. The information reported will include your spouse’s name, address and BSN number as well as the highest balance in the account during the year. That information is sent to the US Department of Treasury.
Does your spouse own shares in a BV or VOF?
At the time of the marriage, you effectively inherit those shares and must report the information of the company to the IRS. This is a complex reporting requirement that will require the help of a licensed tax advisor.
Did your spouse spend time working in the US during the year?
That can also mean a reporting requirement. There can be a multitude of other ways your spouse becomes trapped reporting information to the US.
We have US citizen kids. Can I file Head of Household?
Maybe! You could have a better tax advantage by choosing Head of Household status instead of filing jointly or filing separately. There are strict requirements for this status, including that you must provide more than 50% of the financial support of the household and that you must have a qualifying dependent with a valid social security number.
Maybe around the time of the marriage you will be considering buying a house or having kids. These have important tax implications as well. Marriage and US tax return, look for another blog on this topic, or reach out to discuss.