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The Tax Implications of Having a Non-Citizen Spouse Paid Under the Table


Content provided for general information. Talk to your advisor to learn about recent updates or other rules that may apply to your situation.

It is understandable that you may be feeling overwhelmed and unsure about how to handle your wife's employment situation, given her status as a non-citizen. It is important to address this issue and ensure that you are handling your taxes correctly, as any errors or omissions could have serious consequences for both you and your wife.

Background Information

To provide some context, your wife came to the U.S. in 2020 and was granted entry to pursue an asylum claim. However, she has not yet been given a court date and is considered part of the backlog of individuals awaiting their asylum hearings. This means that she is not classified as an illegal immigrant, but she is also not authorized to work in the U.S. at this time.

Despite this, she has been receiving payment under the table, without any formal pay stubs. While this may have been a convenient arrangement in the past, it is important to address this situation now that you are married and preparing to file your taxes jointly.

Tax Implications

In the eyes of the IRS, your wife's income earned under the table is still considered taxable income. This means that it must be reported on your tax return, along with your own income. However, since she does not have a Social Security Number or Individual Taxpayer Identification Number (ITIN), you may be wondering how to go about reporting this income.

The first step you should take is to consult with a tax advisor. They will be able to provide you with specific guidance for your unique situation and help you navigate the tax implications of having a non-citizen spouse receiving income under the table.

In general, it is recommended to apply for an ITIN for your wife before filing your taxes. This will allow her to have a tax identification number and be included on your tax return. However, if you are unable to obtain an ITIN before the tax filing deadline, you can still file your taxes without it and include a request for an ITIN on your tax return. You will then be required to file an amended return once you receive her ITIN.

Next Steps

As mentioned earlier, the best course of action would be to consult with a tax advisor to ensure that you are handling your taxes correctly. They will be able to guide you through the process and provide you with specific recommendations for your unique situation.

In addition, it is important to address your wife's employment situation moving forward. While it may have been convenient in the past for her to receive payment under the table, it is not a sustainable or legal arrangement. You may want to consider looking for a job that is willing to sponsor her for a work visa or pursuing other avenues to obtain legal employment for her.

Furthermore, it is also crucial to start the process of filing for your wife's green card as soon as possible. This will not only help you with your taxes, but it will also provide your wife with legal status to work in the U.S. and avoid any potential issues in the future.

In Conclusion

In summary, it is important to address your wife's employment situation and properly report her income on your tax return. Consulting with a tax advisor is highly recommended to ensure that you are handling your taxes correctly and avoiding any potential issues. It is also important to take steps towards obtaining legal employment for your wife and filing for her green card. By following these steps, you can ensure that you are not only handling your taxes correctly, but also setting yourselves up for a successful and secure future in the U.S.