Foreign Spouse – Married Filing Separately Or Head Of Household

growing taxSelecting the best tax filing status is an important factor in tax planning. Making the decision how to treat your foreign spouse for US income tax filing purposes can mean either the loss or savings of significant tax dollars. While we all love to save tax dollars, saving them should not be the only factor considered in making the tax filing status decision. For example, if your nonresident alien (NRA) spouse plans to apply for a green card, and eventually to apply for US citizenship, it may be best to make a special tax election to treat the spouse as a US person for tax filing purposes and to file joint tax returns. The special election (under Section 6013(g) of the US Internal Revenue Code) will be discussed in a later blog posting.

Tax Benefits of Filing Head Of Household

If you do not elect to file a joint income tax return with your NRA spouse, you might qualify to file as head of household (HoH). The qualification requirements are set out later. Filing HoH generally means the income of the NRA spouse is not included on the tax return (a big benefit) and also results in a lower tax rate than if you file as married filing separately (MFS). In addition to lower effective tax rates, you can claim a higher standard deduction when filing HoH. For 2013, the standard deduction for MFS is $6,100 whereas for HoH, it is $8,950.

If you do not elect to treat your spouse as a US person, and you do not qualify to file HoH, you would have to file using MFS status. Many clients come to me having made the mistake and filed using “Single” status when they have a NRA spouse. You may NOT file as “Single” if you are married, regardless if your spouse is a NRA.

Reproduced below are the US 2013 tax tables demonstrating the different tax rates for MFS versus HoH. The top rate of tax (39.6%), for example, kicks in for MFS filers once taxable income exceeds US$ 225,000; on the other hand, for HoH filers, the top rate is not triggered until taxable income exceeds US$ 425,000.

Tax Rate

Married Filing Separate

Head of Household


Up to $8,925

Up to $12,750


$8,926 – $36,250

$12,751 – $48,600


$36,251 – $73,200

$48,601 – $125,450


$73,201 – $111,525

$125,451 – $203,150


$111,526 – $199,175

$203,151 – $398,350


$199,176 – $225,000

$398,351 – $425,000


Over $225,000

Over $425,000

Requirements for Filing HoH

•  Unmarried – To file using HoH status, various requirements must be met. One such requirement is that you must be considered “unmarried”. For US tax purposes in claiming HoH status, you are considered unmarried if your spouse was a nonresident alien at any time during the year and you do not make the Section 6103(g) election to treat your spouse as a resident for US income tax purposes.
•  Keeping Up a Home – To qualify to file as head of household, you must also have paid more than one-half the cost of “keeping up a home” for the year. In making this determination, include in the cost of “keeping up a home” expenses such as rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home.
•  Qualifying Person – You must also have a “qualifying person” living with you for more than half the year (except for temporary absences, such as school). Your spouse cannot be a qualifying person for HoH purposes. You must have another qualifying person, who could be a child, grandchild or certain other relatives, such as your parents. If the “qualifying person” is your father or mother, that person does not have to live with you but you must be able to claim the parent as a dependent.

Exactly who meets the requirements for being a “qualifying person” depends on precise rules. The IRS has set these out in a convenient chart found in Table 4 of Publication 501.

Virginia La Torre Jeker J.D., has been a member of the New York Bar since 1984 and is also admitted to practice before the United States Tax Court. She has 30 years of experience specializing in US and international tax planning as well as international commercial transactions. She has been based in Dubai since 2001; prior to that time she worked in Hong Kong for 15 years as a US tax consultant for international law firms, major banks (including HSBC) international accounting firms (Deloitte) and trust companies. Early in her career she worked in New York with the top-tier international law firm, Willkie Farr & Gallagher.

Virginia is regularly asked to speak at numerous conferences and seminars for various institutes and commercial organizations; publishes a vast array of scholarly works in her area of expertise, been interviewed by CNN and is regularly quoted (or has her articles featured) in local and international publications. She was recently appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland. She was a guest lecturer at the University of Hong Kong, LL.M Program (Law Department) and served as an adjunct Business Law professor at the American University of Dubai and at the American University of Sharjah where she also taught the legal / ethical aspects of internet law and internet based transactions.


One comment

  1. SwissTechie says:

    If America wants to tax foreigners, such as non-resident alien spouses or penalize spouses for being married, then it should grant the entire family US citizenship if they choose to participate in donating the US money. Such theft of money earned by non-Americans in other nations is nothing short of greed-based human rights violations.

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