I am an Australia resident. My spouse is from the US, earning and paying tax to the US IRS.
This answer https://community.ato.gov.au/s/question/a0J9s0000001HCzEAM/p00042451
is still unclear.
" their taxable income"
What does this mean? Taxable as it relates to the IRS, or to the ATO?
If I declare her income, what bearing does it have on my own Tax return? She pays her tax in the US, I pay my Tax in Australia.
Hey @squiresk,
Yes, if you're deemed an Australian resident for tax purposes then you do need to declare your spouse's taxable income. Taxable income is your total income minus any deductions for the financial year. It will be the taxable income that's determined by the IRS when your spouse lodges their tax return.
Including your spouse's income helps us to determine whether your entitled to any specific offsets, rebates, or reductions. It also helps us to work out if you're liable for the Medicare Levy Surcharge.
You may like to read more about spouse details and your tax return in an article we have available on our forum.
Hey @squiresk,
Yes, if you're deemed an Australian resident for tax purposes then you do need to declare your spouse's taxable income. Taxable income is your total income minus any deductions for the financial year. It will be the taxable income that's determined by the IRS when your spouse lodges their tax return.
Including your spouse's income helps us to determine whether your entitled to any specific offsets, rebates, or reductions. It also helps us to work out if you're liable for the Medicare Levy Surcharge.
You may like to read more about spouse details and your tax return in an article we have available on our forum.
Hi @squiresk.
I might be missing something but you said your spouse is "from the US" rather than "in the US". If your spouse lives here in Australia with you, would they not first be submitting an Australian tax return (assuming they're over the filing threshold) based on our tax year to 30 June and then a US return to the IRS later for their tax year, i.e. the calendar year?
Australia has first rights to tax income, even if all that income is from foreign employment, and your IRS return uses either the Foreign Earned Income Exclusion or Foreign Tax Credit to avoid double taxation. And the ATO's definition of taxable income includes worldwide income for the fiscal year less any applicable deductions.
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