u.s. expat tax guide – singapore
Do I need to report my Singaporean spouse’s income on my US tax return?
The short answer is no—if you file as Married Filing Separately (MFS) and your spouse has no ties to the US (no Green Card, no US citizenship), their income does not need to be reported.
However, there are exceptions. If you own a joint rental property with your spouse, you only need to report your share of the income on your US tax return. For example, if you own 30% of the property, you only report 30% of the rental income. The same applies to joint bank accounts—you report 50% of the interest earned if the account is equally shared.
On the other hand, if you choose to file as Married Filing Jointly (MFJ) to access higher deductions and filing thresholds, your spouse will need to apply for an Individual Taxpayer Identification Number (ITIN) and report their 100% worldwide income on the tax return.
While this approach can be beneficial in certain cases, the vast majority of US expats—90% to 95%—do not include their foreign spouse on their US tax return unless there’s a compelling reason to do so.
Do I need an ITIN or SSN for my foreign spouse?
Yes—if you plan to include your spouse on your US tax return in any capacity, they need a Tax Identification Number (TIN). This can be:
- Social Security Number (SSN) – Used mostly by US citizens and Green Card holders, as well as certain visa holders authorized to work in the US.
- Individual Taxpayer Identification Number (ITIN) – Issued if your spouse is not eligible for an SSN. To get an ITIN, file Form W-7 with the IRS and include the required proofs of identity (such as certified copies of a passport).
If you file as Married Filing Jointly, you’ll still have to list your spouse on your tax return and provide their TIN. Lack of a valid SSN or ITIN can delay or reject your return.
It’s also important to be aware of additional reporting:
- FATCA regulations may require you to file Form 8938 if your combined foreign assets exceed certain thresholds.
- FBAR (FinCEN Form 114) is needed if the total value of your foreign financial accounts is over US$10,000 at any point during the year.
What happens if I include my foreign spouse’s income on my US tax return?
Including your spouse’s foreign income happens when you file jointly. In that scenario, you combine both of your earnings—your own worldwide income plus your spouse’s Singapore-based income—and report the total to the IRS.
Here’s what that can mean:
- Higher Combined Income: You might land in a higher tax bracket because US tax rates are progressive (they rise as your income increases).
- Larger Standard Deduction: Married Filing Jointly gives you a bigger standard deduction, which can lower taxable income. You may also qualify for certain credits, like the Additional Child Tax Credit or the American Opportunity Credit, which can be more generous when filing jointly.
- Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC): If you meet the Physical Presence Test or Bona Fide Residence Test, you can use the FEIE to exclude part of your foreign salary. Additionally, if you or your spouse pays taxes in Singapore, you could claim the Foreign Tax Credit to avoid double taxation on that same income.
- Bank Account and Asset Reporting: Your spouse’s foreign bank accounts and other assets become reportable on FBAR or Form 8938 if their combined value exceeds the reporting thresholds.
Sometimes, adding a spouse’s foreign income doesn’t necessarily raise your US tax bill if you can use exclusions and credits effectively. However, it does mean more paperwork—and your spouse’s finances fall under US tax rules.
Weighing the pros and cons of including your spouse’s income? Get professional advice tailored to your circumstances.
What are the tax implications of having a nonresident alien spouse?
A nonresident alien spouse is someone who is not a US citizen, not a Green Card holder, and does not live in the US as a resident.
Here are the main filing options:
- Married Filing Separately (MFS)
- You report only your income to the IRS.
- Your spouse doesn’t need to file a US tax return if they have no US-source income.
- The trade-off: You typically get a lower standard deduction and lose access to some credits available to those who file jointly.
- Married Filing Jointly (MFJ)
- You can treat your spouse as a resident alien for tax purposes and combine both incomes.
- You both have to disclose worldwide income, which includes your spouse’s Singapore earnings.
- Your spouse needs a TIN (ITIN or SSN).
- You can benefit from a larger standard deduction and potentially more credits, but the paperwork increases.
- Head of Household (HOH)
- Not usually available if you have a spouse, but if you have a qualifying child or dependent and your nonresident spouse does not live with you for over half the year, you might file as HOH.
- This can offer better tax rates than MFS, but the rules are strict.
If your spouse has any US-source income, they might need to file a Form 1040NR (Nonresident Alien Income Tax Return) to declare that US income separately.
However, if they have no US-related earnings, they can often stay out of the US tax system entirely—unless you decide to bring them in by filing jointly.
How does residency status affect my tax obligations?
In Singapore, the Inland Revenue Authority of Singapore (IRAS) decides if you are a tax resident or a non-resident for local tax purposes.
- Singapore Tax Residency:
- You are generally a tax resident if you stay or work in Singapore for 183 days or more in a calendar year. Tax residents pay progressive tax rates (ranging from 0% to 22%) on their Singapore-sourced income and can claim local tax reliefs.
- If you stay in Singapore for fewer than 183 days, you may be taxed as a non-resident, often at a flat 15% or the resident rates (whichever results in more tax).
- US Tax Obligations:
- You still have to file a Form 1040 each year to the IRS, reporting all income you earn worldwide. If the total of any foreign accounts you hold exceeds US$10,000 at any point, you must file an FBAR (Foreign Bank Account Report).
- You may qualify for certain breaks, such as the Foreign Earned Income Exclusion (FEIE) or the Foreign Housing Exclusion, if you meet the Physical Presence or Bona Fide Residence tests. You can also use the Foreign Tax Credit (FTC) to offset US taxes by the amount of Singapore tax paid on the same income.
Although Singapore’s territorial tax system usually only taxes what you earn in or bring into Singapore, the US wants to see your entire global income. By properly claiming exclusions and credits, most Americans in Singapore can avoid being taxed twice on the same money.
How do tax treaties and foreign tax credits help reduce double taxation?
The US generally signs tax treaties with other countries to prevent double taxation. However, the US does not have a comprehensive tax treaty with Singapore for personal income. In spite of this, you can still use these methods to lower your US taxes:
- Foreign Earned Income Exclusion (FEIE)
- Lets you exclude a portion of your foreign-sourced salary if you meet certain requirements (Bona Fide Residence or Physical Presence).
- Reduces how much of your income is subject to US tax.
- Foreign Housing Exclusion
- Allows additional exclusions for housing expenses in Singapore, above a base amount.
- Particularly helpful in a high-cost city like Singapore.
- Foreign Tax Credit (FTC)
- Credits the Singapore taxes you pay on the same income you report on your US return.
- Prevents you from paying full taxes to both Singapore and the US on the same money.
- Other Deductions and Credits
- You might still claim deductions like charitable contributions or credits such as the Additional Child Tax Credit if you meet the requirements.
Without a standard tax treaty between the US and Singapore, these measures (FEIE, Housing Exclusion, FTC) become essential to ensure you’re not double-taxed.
Properly combining them can often bring your US tax liability to a minimal amount—or even zero—depending on how much Singapore tax you pay and whether you qualify for the exclusions.
Ankurita Lala, an IRS Enrolled Agent with 6 years of expat tax experience, specializes in helping individuals and entrepreneurs navigate the complexities of foreign business ownership. *Schedule a consultation with Ankurita today.
*30-minutes US$247.
