My has a job in the Japanese economy and I for the US Navy in Japan. I know that I do not have to claim her income or do I? I can't really find any good information about this on the internet. If I have to show she income for some reason for information purposes. If can file a joint return and get the marriage benefit. I just if anyone knows a good tax online service that deals with this sort of thing or someone locally. I think it is abit complicated for the VITA people onbase.

Actually, the VITA people are used to dealing with working host-nation spouses.  You claim the income, but then you get to deduct it.  Can't do it online, so I suggest their help.

There is a $70,000 overseas earned income exclusion. Yes, you do have to claim it but then the $70K is deducted again. One caveat I can offer is that you must be overseas 90% (I believe that is the %) of the time. Guam is considered to be part of the US for tax purposes.

If you file your taxes jointly then you must include her income on your taxes, then you will also fill out a form 2555 (Foreign Earned Income) and it changes every year, but last year you were able to exclude up to 88,200 USD. Since your wife is a Japanese citizen and IS required to also pay Japanese Taxes all of her income should be exempt (unless she makes a ton per year). What NichiBeiOne said above would only apply to you if you also earned income out in town (from a Japanese company). Since you are not a legal resident of Japan (kind of like a green card holder) you have to prove that you were outside the US for 330 days for the tax year in order to qualify for the Foreign Earned Income exclusion. As they said above (or below depending on your setup) VITA is able to help you. I prefer TurboTax online and have been using them for 10 years with the same situation you are talking about.

Hello All, I would like to add a few things here...If your spouse is a foreign national and is working off base, has salary, paying taxes, she is considered a Non-Resident Alien for tax purposes and you are filing a "Joint" return, then "YES" you HAVE to claim her income! If she's not making more then what was stated above in the previous post, she won't have to pay any US taxes, however, what most people miss, is that your own taxes will increase because your filing a "Joint" return and your spouse had income. To make my point, if you use Turbo Tax, you can manipulate the return with and without the spouses income (with and without the 2555) and you'll see what I mean. Yes, her income will be exempt from US tax on the 2555, and if it's not over the amount specified above, however your tax will go up because your total income is more with the spouses and you claimed a "Joint" return....the Gov't sort a saying, yea, your spouse is a foriegn national and isn't required to pay our tax, but we gotcha anyways on your income because you are filing the "Joint" return and getting the benefits for claiming the "Joint" status!! I think this has been in place since 2007/2008?
The bright side...you are making more with her income (hopefully saving more) and the tax would never be more then what she is making! If the spouse is making a million or wins Jumbo/Lotto 6, change your status to "Married Filing Separately" and you don't have to claim those winnings!!!....maybe!?!?