Does this mean you still have to file tax returns in your home country too? That sounds like a paperwork nightmare!

It depends on your home country's rules. Many countries have their own requirements for non-resident citizens. In my case (from the UK), I still had to file there for the income I earned while physically present, then file in the US for my worldwide income for the entire year. The US-UK tax treaty helped prevent double taxation, but I still had to file both places. The foreign tax credit on my US return essentially gave me "credit" for taxes already paid to the UK. Not all countries have tax treaties with the US though, so your situation might be different. Definitely worth researching your specific home country's rules!

That's a really practical tip about writing in red ink - thank you! How exactly would we terminate this election in the future if needed? Is there a specific form or another statement we'd need to file?

You'd terminate the election by filing another statement with your tax return saying you're revoking the Section 6013(g) election. There's no specific form - just a signed statement from both spouses. The election also automatically terminates if: 1) either spouse dies, 2) you get legally separated or divorced, 3) either the IRS or you terminate it because of inadequate records, or 4) you become a US citizen or resident alien through other means (like getting a green card). If you're planning to stay in the US long-term, you probably won't need to worry about terminating it.

If I already filed for 2021 last year but didn't claim the recovery rebate, is it too late to amend now? Is there a deadline?

You generally have up to three years from the original filing deadline to file an amended return, so you should still have plenty of time to amend your 2021 return. For 2021 returns (originally due April 2022), you would have until April 2025 to submit an amendment. Just make sure when you file the 1040-X that you're only claiming the recovery rebate credit if you were actually eligible and didn't receive the stimulus payment. You'll need to complete the Recovery Rebate Credit worksheet to determine your eligibility and amount.

Unfortunately, if you were claimed as a dependent on someone else's 2021 tax return, you weren't eligible for the third stimulus payment on your own. The payment would have gone to whoever claimed you (like your parents), but it was only for dependents under 17 for most of the stimulus payments.

1 That's a really good point! I think I need to calculate my MAGI too since I'm right on the edge for some education credits. Is there a simple way to figure out what gets added back to AGI to determine MAGI? My tax software is confusing me.

14 The main items that get added back to your AGI to calculate MAGI include student loan interest deductions, tuition and fees deduction (though this has expired), half of self-employment tax, excluded foreign income, non-taxable Social Security benefits, and IRA contribution deductions. For education credits specifically, your MAGI calculation would add back any foreign income exclusion, foreign housing exclusion/deduction, and excluded income from Puerto Rico or American Samoa. The student loan interest deduction actually doesn't get added back for education credit purposes, which is good news if you're on the edge of qualifying.

4 But wouldn't that only work if your income sources and deductions stayed pretty much the same from year to year? The OP mentioned this is their first year with multiple income sources.

Wait so if my ETH earns staking rewards I have to report that as income even if I never sell the ETH? That seems ridiculous - how do you even track the value at the exact moment you received each tiny reward?

Exactly right. The IRS considers staking rewards similar to interest income - taxable when received even if you don't sell the underlying asset. It's like if you earn interest in a savings account, you pay taxes on that interest even if you don't withdraw it from the bank. Most staking platforms now provide reports showing the USD value at the time each reward was issued. Without those, it can be extremely difficult to calculate manually, especially with daily or even hourly reward distributions. This is actually another area where tracking tools like the one mentioned earlier can help since they automatically record the USD value of each reward when it hits your wallet.

I used TurboTax last year for my crypto and it was ok for basic stuff. You can import from major exchanges like Coinbase directly. But if you have DeFi transactions or used multiple smaller exchanges, it gets messy fast. Had to manually enter a bunch of transactions which was tedious.

That's a really good point about student loans! Do you know if there are other income-based programs that might be affected by filing status? I'm wondering about healthcare subsidies too.

Yes, healthcare subsidies through the Marketplace can definitely be affected by your filing status! Filing jointly combines your income which could potentially reduce or eliminate your subsidy if it pushes you over the threshold. This is something many people overlook when deciding how to file. Other income-based programs that can be affected include certain tax credits like the Earned Income Credit, Child and Dependent Care Credit, and education credits which phase out at higher income levels. Some medical expense deductions are also affected since they're only deductible to the extent they exceed a percentage of your AGI.

You generally need to file a tax return in any state where you earned income, regardless of your federal filing status. So if you have income in Indiana and your husband has income in Illinois, you'd each need to file in your respective states.