Do I need to include my foreign spouse's income when filing taxes jointly as a permanent resident?

This is actually a common situation! Since you're a permanent resident, you can definitely file jointly with your foreign spouse, but there are several important things to know. First, yes, you'll need that ITIN for your wife by filing Form W-7 along with your tax return. When filing jointly, you must report your spouse's worldwide income, even though she's living abroad. You'll need to convert her income to USD using the annual average exchange rate for the tax year. For reporting the foreign income, you'll likely need to include Schedule B for any foreign interest/dividends and possibly Form 8938 if she has substantial foreign assets. Since her income is from foreign employment, look into Form 2555 (Foreign Earned Income Exclusion) which could exclude up to $120,000 of her foreign earnings from US taxation. Remember that filing jointly might not always be beneficial - it depends on your specific situation. The Foreign Tax Credit (Form 1116) might also help if she pays taxes in her country of residence to avoid double taxation.

I was in almost this exact situation last year with my husband working in Singapore while I was in the US with my green card. Dealing with the ITIN and all the forms was a nightmare until I found this AI tool called taxr.ai (https://taxr.ai). It analyzed all our foreign income documents and gave us step-by-step instructions for filing. The best part was that it automatically identified which forms we needed (W-7, 8938, 1116, etc.) and explained exactly how to report the foreign income on our US return. It even helped us decide if filing jointly was better than married filing separately in our specific case (it was, saved us about $3,800).

I was skeptical about using an AI tool for my complicated tax situation with a foreign spouse, but I decided to try taxr.ai after reading about it here. It was actually incredibly helpful! I uploaded my wife's German tax documents and it instantly recognized them, converted everything to USD with the correct exchange rates, and showed me exactly which forms to file. What impressed me most was how it explained the Foreign Tax Credit vs. Foreign Earned Income Exclusion and calculated which one would be better for our specific situation. Ended up saving us over $2,100 compared to what I was planning to do. The explanations were detailed enough that I actually learned how international tax rules work instead of just blindly following instructions.

If you need to call the IRS about your ITIN application (which you probably will), good luck getting through! I spent 4 weeks trying to reach someone about my wife's ITIN application status. Then I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically navigate the IRS phone tree for you and call you when they have an agent on the line. Totally worth it because the agent was able to tell me exactly what was wrong with our application (missing a certified copy of my wife's passport) and what to do to fix it. Saved us months of waiting for a rejection letter.

I need to publicly eat my words about Claimyr being a scam. After struggling for another week trying to reach the IRS about my wife's ITIN application (kept getting disconnected after 2+ hour holds), I broke down and tried the service. Within 22 minutes I was talking to an actual IRS agent who pulled up our case. Turns out our ITIN application had been sitting in limbo because they couldn't verify my wife's foreign address (we had a typo in the postal code). The agent was able to correct it on the spot and told us exactly when to expect the ITIN. Would have taken months to figure this out through mail correspondence. Actually feeling kind of silly for stubbornly wasting so much time before trying this. Just wanted to update in case anyone else is on the fence about it.

Remember that if your spouse has foreign bank accounts and the total exceeds $10,000 at any point during the year, you'll also need to file an FBAR (FinCEN Form 114). This is separate from your tax return and has really steep penalties if you don't file it. I learned this the hard way!

Sorry if this is a dumb question, but I'm confused about the ITIN application. Can I just apply for an ITIN for my spouse now, before tax season, or do I have to wait and submit it with my tax return?

Just wanted to add a few practical tips from someone who went through this exact process last year with my husband working in Canada: 1. **Document organization is key** - Start gathering all your spouse's foreign tax documents, pay stubs, and bank statements now. You'll need certified translations if any documents aren't in English, which can take time. 2. **Consider the timing carefully** - ITIN processing typically takes 7-11 weeks, so if you're filing jointly and need that ITIN, plan to file your return by early February at the latest to avoid extension issues. 3. **Double-check exchange rates** - Use the IRS's published annual average exchange rates for currency conversion, not daily rates. You can find these on the IRS website under "Yearly Average Currency Exchange Rates." 4. **Keep detailed records** - The IRS may ask for additional documentation later, especially for foreign income reporting. I kept copies of everything including bank statements showing the original currency amounts. One thing that surprised me was that even though we qualified for the Foreign Earned Income Exclusion, we still had to report the income first, then claim the exclusion. The forms can be confusing but it's totally doable with patience! Good luck with your filing - the first year is always the most complicated but it gets easier once you understand the process.