Foreign Income-Non-Resident Alien of Spouse

[KC-CPA]

I have a client who lives in the United States and is married to a spouse who lives in Mexico (all year). The spouse in Mexico does have a Taxpayer Identification Number. The taxpayer living in the US wants to file married filing jointly which makes her spouse in Mexico a resident alien and would require us to include his income on the return.

The only documentation for the mexico spouse income is one pay stub check, she does not have an official document for total income for the year but does show a total for the year of about $3,500 (converted from Pesos using a rate of 19.227).

My question is, to include the income where should it go ? does form 2555 just need to be completed? It looks like the income may be excluded anyway due to the amount and that he lived in Mexico ALL year.

and -- what type of documentation do we need to require for Mexico income as the client does not seem to have any official form they can provide and stated employer did not provide one, which makes me concerned ?

Any insight or experience you can share is much appreciated.

[ttbtaxes]

I don't have an answer for Form 2555. As a general matter, the area of foreign tax and reporting is specialized and fraught with land mines. There are worldwide income, foreign disclosures of assets, FBAR, signatory authority, gifts, and other issues. As I understand it, in order to be a resident alien, the spouse must pass either the green card or substantial presence test. If he fails both tests then he is a nonresident alien and they need to make a Section 6013(g) election that will treat the non-resident alien as a resident alien. That election is binding for all future years.

A family member of mine is married to a nonresident alien. They had a W-2 and a home. I wouldn't prepare their return for concern of the disclosure issues or if there was something else I didn't know or couldn't unearth. YMMV. Good luck.