Filing Taxes When Your Spouse and Children Are Still Overseas: Joint or Separate, and How the ITIN Works

A green card holder is a U.S. tax resident and reports worldwide income. If your spouse has no U.S. status, you can file jointly or separately, and each route has a cost. Children who live abroad with no U.S. status cannot be claimed. This week a truck driver asked about exactly this: wife in China with no income and about 80,000 RMB in savings, two children in China. Filing jointly is the right answer for him. Here are the two routes, the rule on children, and how the ITIN works.

Married Filing Jointly

You make a written election to treat your spouse as a U.S. resident for tax purposes. The 2026 standard deduction is $32,200 on a joint return versus $16,100 filing separately. If your spouse has no income, the extra $16,100 is simply untaxed.

Three consequences come with it:

• Your spouse needs an ITIN.
• From the election year onward, her income in China is reported on the U.S. return. Chinese tax paid can be credited.
• The election can be made once in a lifetime. Once ended, neither spouse can make it again, even with a different spouse.

Foreign account reporting involves two forms, and they treat an electing spouse differently. The FBAR (FinCEN 114) is not required: residency for FBAR purposes is determined under §7701(b) without regard to this election, as stated in FinCEN's 2011 rule preamble and IRS Manual 4.26.16. Form 8938 depends on thresholds: a married couple filing jointly and living in the U.S. must file when their combined specified foreign financial assets exceed $100,000 at year-end or $150,000 at any time during the year. Savings of a few tens of thousands of RMB do not come close.

Married Filing Separately

No ITIN for your spouse; write "NRA" in the spouse SSN field and you can still e-file. The standard deduction is half, and your spouse stays outside the U.S. tax system. If she has income in China, or assets near the thresholds above, this route is worth running the numbers on.

Children

A child who lives outside the U.S. and has no U.S. status is not a dependent. IRC §152(b)(3) requires a dependent to be a U.S. citizen or resident, or a resident of Canada or Mexico. No child credits are available, and an ITIN for the child buys nothing. A child born in the U.S. with a U.S. passport is a different calculation.

Getting your spouse an ITIN

An ITIN cannot be applied for on its own. The Form W-7 instructions state that a spouse qualifies only by being listed on an attached U.S. tax return and claiming an allowable tax benefit, and the first item on that list is "a spouse filing a joint return." So the W-7 is mailed on paper together with the joint return, the first year cannot be e-filed, and applications from abroad take the IRS 9 to 11 weeks.

The IRS accepts only the original passport or a copy certified by the issuing agency; notarized copies are rejected. To avoid mailing the original, your spouse can visit an IRS-authorized Certifying Acceptance Agent in China, who verifies the passport in person and issues a W-7 Certificate of Accuracy to mail with the return. Beijing, Shanghai, and Shenzhen all have them, and the IRS website lists them. The list does not say which ones can issue a COA, so call first.

A passport with no U.S. entry stamp is fine for a spouse; that restriction applies only to dependents.

Once issued, the ITIN is used on every future return. It does not need to be reapplied for.

For what goes on the personal return itself, see A Truck Driver's First Tax Year: W-2 or 1099.

FAQ

My wife is in China with no income. Joint or separate?

If she has no income and foreign assets well below the Form 8938 thresholds, filing jointly adds $16,100 of standard deduction and is usually the better result. If she has income in China, run both and compare.

Does my wife's bank account in China have to be reported to the IRS?

No FBAR: an electing spouse is not a U.S. person for FBAR purposes. Form 8938 applies only if the couple's combined foreign financial assets exceed $100,000 at year-end or $150,000 at any time during the year (married filing jointly, living in the U.S.).

Can I claim my children who live in China?

No. A child outside the U.S. with no U.S. status is not a dependent, so neither the Child Tax Credit nor the Credit for Other Dependents is available. Do not apply for ITINs for them.

Do I have to mail my wife's original passport for the ITIN?

You can mail the original, mail a copy certified by the issuing agency, or have her visit an IRS-authorized Certifying Acceptance Agent in China who issues a Certificate of Accuracy. Notarized copies are not accepted.

Can the joint-filing election be changed later?

It can be ended, but once ended neither spouse can make it again, even with a different spouse. Once in a lifetime.

This article is general tax information and is not tax, legal, or accounting advice for your individual situation. Confirm current rules with the IRS or consult a professional advisor such as Mingtu.