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Old 30.11.2014, 20:53
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IRS scrutiny of British citizen if married to US citizen??

My son will be marrying next year. He's US, she's British. She has her own career and income, and her own bank account. Will my son be required to report her finances when he files his US tax declaration? And will he have to file FBAR's showing her money to the US authorities as well as his own?
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Old 30.11.2014, 21:51
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Re: IRS scrutiny of British citizen if married to US citizen??

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My son will be marrying next year. He's US, she's British. She has her own career and income, and her own bank account. Will my son be required to report her finances when he files his US tax declaration? And will he have to file FBAR's showing her money to the US authorities as well as his own?
Assuming all of the below are true:
1. She's not a U.S. citizen (even if she doesn't have a passport)
2. She's not a U.S. green card holder
3. She's not a U.S. resident (including substantial presence test)
4. She has no assets or income in the U.S.
5. She has no shared assets with your son

Conclusion based on above:
No, he does not need to report anything for her. He files his FBAR for himself and his own accounts. He files IRS Form 1040 as Married-Filing Separately.

If any one of the 5 points above are different than stated, he might have to report her information on one or more forms.

Last edited by 3Wishes; 30.11.2014 at 21:52. Reason: forgot a few words
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Old 01.12.2014, 10:43
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Re: IRS scrutiny of British citizen if married to US citizen??

I think 3Wishes gave the simplified answer, but life is indeed more complex sometimes.

A few things to be aware of, keep everything 100% separate, banking, financial and assets if possible. No joint credit cards, no joint bank accounts, no joint rental deposit accounts, etc...No signature rights on spouses account on others banks accounts, etc.. no trusts in common. And if they have a house or property in common be very careful as well, mortgage accounts would normally be in the name of both.
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Old 01.12.2014, 20:30
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Re: IRS scrutiny of British citizen if married to US citizen??

Thanks to both runningdeer and 3wishes for your advice. All points are correct, 3 wishes. The finances are completely separate and each pays their share of houshold expenses. So far. And if I understand correctly, if they get anything in common (mortgage, credit cards etc) then it's only that particular account that gets reported. This allows my future daughter-in-law to continue to manage her finances, while just keeping a few small things in common. Her earnings are likely to become significant and she certainly doesn't want the US suddenly snooping around! My son, on the other hand, already knows how to jump through their hoops.
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Old 02.12.2014, 08:57
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Re: IRS scrutiny of British citizen if married to US citizen??

While she won't owe tax based on her earnings, any joint accounts will need to be declared, as others have indicated above.

Moreover, even if your son files as 'married filing separately', her income will come into play when determining the amount of foreign tax credit that he can claim. Because Switzerland taxes married couples jointly, it isn't as simple as claiming the amount of quellensteuer that's been paid.

You need to calculate the total Swiss tax liability, then share that on a pro-rata basis in the same proportions as the respective salaries. In your son's case, this is actually to his benefit as he's the lower earner. He'll profit from your daughter-in-law's higher tax bracket, yielding a bigger foreign tax credit.

In my case, I'm the higher earner (I'm a US citizen; wife is a foreign national). Unfortunately, I end up being able to claim less of a tax credit than is actually withheld in quellensteuer, which is a little depressing.

Last edited by Village Idiot; 02.12.2014 at 09:23.
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Old 02.12.2014, 09:05
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Re: IRS scrutiny of British citizen if married to US citizen??

Does anyone know if the US actually does anything with the information from say, a joint checking account? Or a joint rental deposit account?

(Will they say, look at suspicion with a particularly high balance in any of the joint accounts? Just trying to understand the risk...)
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Old 02.12.2014, 15:04
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Re: IRS scrutiny of British citizen if married to US citizen??

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Does anyone know if the US actually does anything with the information from say, a joint checking account? Or a joint rental deposit account?

(Will they say, look at suspicion with a particularly high balance in any of the joint accounts? Just trying to understand the risk...)
I think they would only start to question if your FBARs are not in line with the account info reported by the bank.
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Old 02.12.2014, 22:03
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Re: IRS scrutiny of British citizen if married to US citizen??

Thanks for all the advice! I think I've got the basic picture now.
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