Do I have to report my non-resident spouse's income?
Not unless you choose to. A US person married to a non-resident can leave the spouse outside the US system, in which case the spouse's own income and their own accounts are simply not part of your return. The alternative is an election that treats the spouse as a US resident, and that election brings their worldwide income in, whatever its source and whether or not it has any connection to the United States, along with their foreign accounts. So the answer depends on a decision you make rather than on the marriage itself, and it is not a choice you can switch on and off year by year.
Can we file a joint US return if my spouse is not American?
Only by electing to treat the non-resident spouse as a US resident for tax purposes. Joint filing status is the thing the election buys, and it is what makes the arrangement attractive: one set of brackets and one standard deduction across the couple, rather than the much less generous treatment a US person filing separately from a foreign spouse receives. The price is that the spouse's worldwide income joins yours in the US base, and their accounts and assets abroad become reportable. Whether the exchange is worth making turns on the income mix, on the credits available for foreign tax already paid, and on how much reporting the spouse's holdings would add.
Does the election bring my spouse's foreign bank accounts into reporting?
Yes, and that is the part people most often underestimate. Bringing a spouse into the US system as a resident brings their accounts with them, so an FBAR position and the wider foreign asset reporting now cover holdings that were previously outside the system altogether. For a spouse with a long financial history in their own country, that can mean a long list of accounts, some dormant, some held jointly with their own relatives. The reporting is annual, and it does not stop in a year when the election happens to produce no tax benefit. Count the accounts before deciding, not after.
My spouse has no income of her own, should we elect?
That is the case where the election most often helps, because the joint filing status is obtained without much extra income entering the US base. But no income today is not the same as no income for the life of the election, and the election is easy to make and hard to revoke. A spouse who later inherits, sells a property at home or starts a business will find that income inside the US system. The other thing to check is accounts rather than income: a spouse with no earnings can still hold substantial savings at home, and those become reportable.
Can the election be reversed if it turns out to cost us?
Not readily. Making it is a matter of a statement filed with a return; unwinding it is not symmetrical, and once it has been ended it cannot simply be made again the next time it would be useful. That asymmetry is the reason to model the decision over several years rather than for the year in front of you. The questions to run are what the spouse's own country will tax in the years ahead, whether credits will cover the US tax on their income, and how the reporting burden grows. A position that is right for one filing season can be wrong for the decade.
Which of our accounts count as mine for US reporting?
Reporting follows ownership and signature authority rather than whose money it feels like. A US person reports accounts they own and accounts they can sign on, which includes a joint account held with a non-resident spouse and sometimes an account in the spouse's name that the US person has authority over. The spouse's own accounts, held in their name alone, stay outside the system while the spouse does. The practical step is a full inventory of every account either of you touches, with the ownership and the signing rights recorded against each one, before working out which side of the line it sits on.
How does a non-resident file a tax return?
On the non-resident form for that country, reporting only the income that country may tax. In the US that is the 1040-NR; in Canada it is a T1 restricted to Canadian-source amounts, plus the elective returns under sections 216 and 217 where withholding on rent or pension income exceeded the real tax. The commonest error is filing the resident form by default and reporting worldwide income to a country with no right to it. See Form 1040-NR.
What is the US exit tax?
A charge that applies when a US citizen renounces or a long-term permanent resident gives up their status and meets one of the covered-expatriate tests — an income test, a net-worth test, or a failure to certify five years of compliance. A covered expatriate is treated as having sold worldwide assets on the day before expatriation, and Form 8854 is what reports the position. The tests turn on figures that are indexed, so they are read for the year of expatriation. See Form 8854.
