US Tax Filing options (US Citizen, UK Resident, married to UK citizen)

I was married in the UK last year.  I see no reason to start including my UK spouse's income in any US tax calculations.  Question:  Is there any reason I can't continue to file as single?

The "Married filing separately" option is awful because you reach the higher tax brackets faster producing a higher tax bill.

Yes there is a reason - you would be signing a return each year where you perjure yourself.

If you knew marriage would cost you money then why get married (and yes this is meant as a rhetorical/cynical response )!

Hi,
Unfortunately, the situation kind of sucks. We just went through this as this is our first year of marriage. You are no longer allowed to file as 'single' you have two choices. You can file as 'married filing jointly' which would not work for us as when you file jointly you have to declare your spouse's income as well. Which means we'd pay income taxes to the US on my husband's salary (after whatever the exemption is) So, I had to file as 'married filing seperately' which you're right means you lose a lot of tax breaks. However, if you didn't earn any money in the US during 2006 you won't be losing anything. In addition, your spouse will have to get a ITIN (Individual Tax Identification number) if they don't have an SSN - unfortunately you can't leave that space blank or you will be fined. It was actually not that difficult for us to get. My spouse and I went to the US embassy where my spouse got a notarized copy of his passport (this was free of charge in Edinburgh) I then wrote a letter to the IRS stating that he was not eligible for an SSN - since he'd never reside, worked nor held an entry visa in the US. We then filled out a W-7 form and I just included all this in my taxes and filed 'married but filling seperately'. This way the US couldn't demand income taxes from a joint salary. I found this link really helpful from the IRS and then I had to phone them in Philly with one or two specific questions. http://www.irs.gov/businesses/small/international/article/0,,id=97324,00.html
Good luck!

Just a question, but seems like I saw somewhere that if you're US citizen, married to UK citizen, with children, and filing separately, you can file as head of household. I'm still looking for where I saw that. Is that correct?

Yes, assuming your UK husband doesn't have a greencard and isn't resident in the US.  The following is the text I include with any return I file in these circumstances:



Taxpayer is entitled to file as Head of Household in
accordance with Internal Revenue Code Section 2(b)(2)(C)
which states that, for purposes of determining whether an
individual qualifies as Head of Household: 

“A taxpayer shall be considered as not married at the close
of the taxable year if at any time during the taxable year
the taxpayer’s spouse is a nonresident alien.” 

The taxpayer’s spouse is a nonresident alien and, as the
taxpayer meets the other tests of IRC Section 2, and as the
children are US citizens and dependants, taxpayer has filed
using the Head of Household filing status and tax rates.

(Rev. Rul. 55-711, 1955-2 CB 13, amplified by Rev. Rul.
74-370, 1974-2 CB 7.)

Excellent! Thank you!

Just a short note to mention that the IRS have a particularly annoying habit of rejecting Head of Household filing status if the taxpayer cannot prove they furnish more than 50% of the costs of maintaining the household.  So the Head of Household filing status can only be used if the US spouse does indeed pay for more than 50% of the mortgage, rent, council tax, utilities etc...