Ep 69: One Cross-Border Marriage and Two Filing Statuses: How The 6013h Election Can Help!
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We discuss the 6013h election, a tax provision that allows certain non-residents to file as U.S. residents.
We explore eligibility criteria, the benefits of filing jointly, and the potential drawbacks, including the requirement to report worldwide income.
We emphasize the importance of consulting a tax professional before making this election and clarify common misconceptions about related tax codes.
Key Takeaways
The 6013h election allows non-residents to file as tax residents.
Eligibility for the election includes being married and both spouses being present in the U.S.
Filing jointly can lead to lower tax brackets and higher deductions, but requires reporting worldwide income and assets.
Once made, the 6013h election can only be revoked before the tax deadline.
The election locks you into joint filing unless certain conditions are met.
Chapters
00:00 Understanding the 6013h Election
03:14 Eligibility and Limitations of the 6013h Election
06:13 Benefits and Drawbacks of Filing Jointly
09:47 Final Thoughts and Resources
Episode Links and ResourcesEp 7: Section 6013(g) - Non-resident, Non-citizen, filing taxes with a U.S. citizen
When the Nonresident Spouse Becomes U.S. Enough for the IRS!
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Jane Mepham, CFP
How do we turn tax code 6013a into real power on your tax return? You're listening to 6013a, the ⁓ election edition, where we break down the fine print so you can win more than just a refund. Okay, let me explain. Let's say you're in the US on some sort of a
spousal of visa. So for example, F2J1H4, you and your spouse are getting ready to file taxes and you find out about different filing statuses available for your tax returns and there are a ton of them. You dig deeper and you sitting there wondering, a minute, we are married. We should be married filing jointly, right? But you're not sure if your visa status allows you to file jointly.
election 6013 come to the rescue. Let's drill in.
Manasa Nadig, EA
Right, so the 6013a ⁓ election is an election that you make to file your US taxes as a tax resident, even if you're deemed to be a non-resident for tax purposes. Now, what does that mean? A tax resident is somebody who lives in the US, so you're either a US citizen, a green card holder,
or you're on some kind of a non-immigrant visa, but you have met the substantial presence test, or you're on a non-immigrant work visa that considers you to be a tax resident. So the examples of such a combination could be someone on a J1 and the spouse is on a J2, someone on an F1, the spouse is on an F2, et cetera. Now, who can make this election?
spouses, obviously, if you're married, can make an election to file jointly on one return. And by filing jointly, they take all of the advantages that come with filing a married filing joint US return. And this can be done even if one of the spouses has no income or no deductions.
And so that naturally brings us to the next question. Who cannot make this election? So you might be married, you might be here on a non-immigrant work visa, but your spouse is not here with you in the U.S. and they are considered to be a non-resident alien or an NRA. So you cannot make the 6013a election with them.
So both of you should be physically present in the US and only then can you make a 6013a election to file jointly review.
Jane Mepham
Okay. So let's talk about the when, when can you make these elections? So the original election needs to be made within the S O L or statute of limitation for the year for which the election is being made. Okay. If you've received some sort of a tax deficiency, a tax letter, what we call a love letter from IRS, you cannot make these election. I'm sorry. Also,
Either spouse cannot have an ongoing court case. So if there's some sort of a civil or criminal suit going on, they, you cannot use it. And then there are circumstances when the joint election may be classified as deemed to have been filed. If this happens, please talk to a tax professional. That's going to be the best advice we can give you. And so then the next question is,
Why do we do this? What are the benefits? And I suppose what are the non-benefits of doing this?
Manasa Nadig, EA (04:17)
Yeah, but before we go into that really quickly, Jane, you is just talking about consulting with a tax pro. I think that you should consult with a tax pro if at all you're thinking about making a 6013a election. know, do not go into it with your, you know, eyes closed Yeah, yeah, yeah. Do not DIY this return. ⁓ So yes, what are the benefits of making a joint tax?
Jane Mepham
On your own.
Manasa Nadig
filing a joint tax return, Obviously, you're going to be in a lower tax bracket than if you were filing married, separate. Now, if you're married, you have to file either married, filing joint or married, filing separate. None of the other filing statuses are available to you. So if you're not going to be filing jointly, you're going to be filing separately, which means there are some deductions, et cetera.
which may not be available to you at all if that is what you want to do. The big one is an IRA contribution, you know, that kind of precludes you from being able to make one if you're filing, married filing separate. Now, are there other deductions available to you which are higher? Married filing joint versus separate, which are, you know, obviously the standard deduction that comes into mind. You get a bigger kick.
out of that deduction than you would, especially if one of the spouses has no income, which means for the very same income, now you are paying less taxes and you're getting a higher deduction. Who wouldn't want that? So who definitely, definitely benefits. But you know us, we are also going to give you the other side of the coin here. What are not benefits of making the succeed?
6013a election. ⁓ Bit of a tongue twister, but all good. Now, the biggest non-benefit of making this election is you have to file your worldwide income and declare your worldwide assets on your US tax return because guess what? Now you're considered to be a US tax resident and therefore that compliance now becomes necessary.
So you may not have any income or deductions in the US at this time, but if you have substantial foreign assets, then you need to weigh the benefits. Do your pros and cons. How much of it do you want to bring into the purview of US compliance? That's the big non-benefit. The other one. Okay. So you're kind of locked into this election.
Let me explain. So once you make the 6013a election, you can revoke it, but you only get until the tax deadline for the year. So it's either April 15 or if you have filed an extension, it's October 15. So you only get until that time to actually walk it back and say, oops, I don't want this election.
It can maybe, there are other benefits, ⁓ which is if you have already filed separately, then you can convert that to a joint filing. But there are some elections that you have already made on a separately filed return that cannot be changed because now you're filing jointly.
or it will not port over into a joint return. And those are many details to that, and we can go into it maybe on a different episode. But these are the big non-benefits here, which is the revocation part where you can revoke it, but before the tax deadline. Once the tax deadline is passed, you're locked in. You cannot revoke that. You need to keep filing jointly.
Of course, until, well, if one spouse unfortunately passes away, then of course it will be revoked or you legally separate, it can be revoked. But unless that happens, now you're kind of locked into this. So these are the non-benefits. Yes.
Jane Mepham
I think what I'm hearing you say is before you make this election or if you ever choose to amend and unravel some elections that you made before, you really should talk to really a cross-border tax pro and they walk you through all the benefits. I think that's really is what it comes down to. And I think the final thing I want to say on this is
Don't confuse 6013a with 6013G, which is somewhat similar, but you can only make these election when you're outside the US. And actually we have a whole episode on this. We'll link to it. I think that's all I'm going to say to that. Anything else? Or do you want to conclude?
Manasa Nadig, EA (09:47)
Absolutely. I totally agree with you. ⁓ Don't walk down the alphabet without a guide and mentor who's a tax pro and knows what they're doing. Yes. So dear listener, thank you so much for stopping by and listening to this episode today. And we would really love for you to go and check out our store on the website.
Jane Mepham
Love it.
Manasa Nadig
And you know what? It's aptly named "THE DIGITAL GRINDS" So you'll love it. ⁓ We've got a whole lot of checklists, et cetera, over there and some freebies. So please go to our website, theimcafe.com, T-H-E-I-M-C-A-F-E dot com and check out our store. And until we meet again in two weeks, thanks for listening. Bye.
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The speakers' views and opinions discussed in this episode should not be considered financial, tax, or legal advice. Consult your advisor for any legal, cross-border tax, and financial advice.