Canadian to marry American outside of our home countries?

[Reba]

as for sponsorship petitions processing timelines, assuming your taxes are up to date, CR1 will take up to one year to complete before your spouse can move to the US. DCF is somewhere between 3 to 6 months.

[Steven]

I'm not saying they should or should not use 2555, I'm simply saying that 2555 or 1116 can be used without prejudice. Several of your posts gave the impression that 2555 was mandatory for any US citizen living abroad. It quite simply is not.

He's not a US tax resident, 2555 is the relevant form. Okay, yeah, if he's been doing 1116 instead but it didn't seem likely for someone living in Japan marrying a Canadian.

[agnelson]

2555 is indeed relevent, not mandatory. 1116 would be used in all cases, for passive income.

steven, I think I'm going to have to ask you to point to some document somewhere that states that 2555 is ever mandatory, because you really seem to have 2555 on the brain.

[Steven]

We're not talking about passive income, we're talking primarily about employment income, this is an immigration issue - they want proof of it. Why would someone living in Japan for any length of time be using Form 1116 for that? They're non-resident, Form 2555 is the form used.

[agnelson]

Form 1116 is to get credit for Japanese tax paid on Japanese income. Why wouldn't they use it?! All USCs living outside US and paying foreign tax end up having to use 1116 on at least some if not all their foreign income.

Form 2555 can only be used to exclude a specific amount of wages. It does nothing for any other form of income, and does not exclude wages exceeding the yearly limit. Form 1116 needs to be used if one wants credit for the tax they pay on that other income.

Moreover, with the anti-stacking provisions introduced 4 years ago, using 2555 without also using 1116 means that one will owe US tax on their foreign non-wage income, so 1116 become even more indespensible. Using 2555 can also prevent one from collecting the child tax credit.

What did you think Form 1116 was for?

[Steven]

But they would still be using Form 2555 in that situation. Income up to the foreign exclusion limit is sufficient for DCF. A person filing DCF has to be resident in that country, therefore by definition they are not resident in the US and would be using Form 2555.

The statement you made earlier in the thread isn't accurate, first of all you cannot know that most US citizens working in Canada use Form 1116 and even if they are, most likely they are not resident here, they're just claiming a foreign tax credit for work they did in Canada. In a situation where they are on the other side of the planet for lengthy periods they will be resident in that country.

I suppose you can construct a situation where a person receives sufficient funds via passive income to be filing Form 1116, but it would be unusual for DCF. To every rule there are exceptions, generally speaking the law requires people to file an accurate tax return and the correct forms for that are 1040 and 2555 for non-resident US citizens working abroad who are filing DCF. If they happen to be resident abroad and receiving money from some other source then yes it could be 1116 but that didn't sound like the original situation described. They may be filing 1116 in addition to 2555, the combination of the two might be needed to show sufficient funds (e.g. earning little but a lot of passive income) but 2555 alone would usually be sufficient.

I'm not sure going on about esoteric situations is relevant to the original question.

[agnelson]

You have consistently said, in many threads related to US citizens working outside US, that they MUST file 2555 with their 1040.

All I'm pointing out is that this is absolutely incorrect. They MUST file a 1040, and they must report all world income on it. However any US taxpayer is free to choose either 2555 to exclude their wages, or 1116 to take credit for the tax on these wages. Other unearned income can only be handled buy 1116.

A 1040 on which solely uses 1116 method, will of course show all income earned. Filing 2555 or 1116 doesn't change the requirement to report all income on the 1040. So sucha return would of course be acceptable in proving income, since it would still report all income, just like a 1040 using 2555.

All US citizens living in Canada for example, are usually counselled to file 1116 for their wages, as 2555 will generally result in a tax bill from IRS (due to anti-stacking), while 1116 will generate a refund in some cases (due to child tax credit). So much for 255 being mandatory.

You seem to think that 1116 is reserved for US residents. (?) Where do you get this notion? I agree that only non-US-residents can use 2555, but that certianly doesn't mean that they must use 2555.