Do immigrants need to file tax returns in the US and how to do it right
For immigrants arriving in the United States, the US tax system can be very confusing, notes CitizenPath. In fact, the US tax system is so complex that most Americans born in the country have difficulty filing documents every year. Generally, U.S. tax laws apply to you if you live in the United States or spend a significant amount of time in their territory.
In the United States, anyone with income above a certain level must file a tax return. This is not the case in all the rest of the world. In many countries, the government withholds taxes on salary checks, and an individual never has to file an income tax return directly. The Internal Revenue Service (IRS) is the US agency responsible for collecting taxes.
Regardless of whether you are a legal permanent resident or an undocumented immigrant, it is important that you get a general idea of your tax return obligations.
What to do if you are a foreigner or non-resident
The IRS uses two tests - green card test and test for significant presence - to assess your status as a foreigner. If you meet the requirements of any of these, the IRS considers you a resident alien for income tax purposes; otherwise, you are treated as a non-resident alien (note: these terms are for tax purposes only and do not imply immigration benefit).
If you have a green card, you are a foreigner. If you do not have a green card and have spent at least 31 days in the United States during the current tax year, as well as 183 days in the last three tax years (including the current tax year), you usually qualify for physical presence and are also considered a foreigner -resident.
As a resident alien, you are subject to the same tax rules as U.S. citizens. This means that you must indicate all income in annual tax returns, regardless of the country in which you earn this money. A non-resident alien must also pay income tax on the IRS, but only on income that is actually related to the United States and usually includes the money you earn while in the United States. All of this can be tricky. If you are not sure that you understand the system correctly, contact a tax specialist.
Why is it important to properly fill out tax data
You may lose your legal permanent residency status depending on how you file (or not file) taxes. It also affects your ability to naturalize as a US citizen.
There are several common ways that taxes can affect your permanent residency status. Firstly, you may have some tax advantages when filing a tax return as a non-resident, but this can adversely affect your immigration status. The IRS has its own way of calculating who is considered a resident or non-resident alien (as mentioned above). Filing taxes to the IRS as a "non-resident" may make the government believe that you live in another country and have refused permanent residence in the United States. Talk to your immigration lawyer before applying as a non-resident.
Likewise, paying taxes in another country may create the assumption that you live in that country. One way to solve this problem is to interview with Customs and Border Control (CBP) representatives when you re-enter the United States. A CBP may ask if you received income or paid taxes in another country. If the CBP determines that you live in a different country, you may go to an immigration court to review your expulsion from the United States.
Naturalization tax history review
Of course, maintaining your permanent residency status is essential for naturalization as a US citizen. Failure to provide tax data can adversely affect your ability to naturalize. In addition, the right to naturalization requires that you demonstrate good morale. When preparing Form N-400, “Application for Naturalization,” you will be asked specific questions about filing taxes. If the US Citizenship and Immigration Services (USCIS) believes that you have somehow escaped your tax liability, it will most likely reject the application based on moral requirements.
If you plan to apply for naturalization and have not filed tax returns or paid taxes in the past, you can solve this problem. Create a payment plan (a so-called compromise offer) with the IRS and start making payments. At the naturalization interview, show your USCIS employee your IRS letter detailing the payment plan, as well as receipts of payments already made according to the plan.
If you have an expired green card
If your green card has expired, you are still a permanent resident of the United States. You still have the same obligation to file your tax return. Update your green card by completing Form I-90 “Permanent Resident Card Replacement Application”. If you are behind tax payments, this will not affect the renewal of your green card, but may affect future immigration benefits. Therefore, take action by contacting a tax specialist and / or developing a payment plan in the IRS.
Refusing a green card may require emigration tax
If you are considering abandoning a US green card and moving to another country, talk with the tax specialist about the consequences. Each year, some permanent residents submit Form I-407 to voluntarily waive their legal permanent residency status in the United States. Although this solution may have some tax advantages, there are also high tax costs. Exiting the US tax system requires a tax on emigration (Exit Tax).
Include spouse in tax documents
Taxes may also affect people who have recently immigrated to the United States as a result of marriage to a US citizen or permanent resident. If you have recently arrived in the United States as a K-1 fiancé or spouse, you should file a joint tax return with your spouse. When filling out Form I-485 to adjust for marriage status, you must prove that the marriage is fair. You will need to submit several documents as evidence of the authenticity of the marriage, with tax documents being crucial. USCIS will review your tax returns (for any relevant years) to confirm that they have been filed together.
After two years of living as a conditional resident, you must submit Form I-751 to remove the conditionality from your status. Again, you must prove that you and your spouse are in a real marriage. Submission of jointly filed tax returns is substantial evidence that should be included in the I-751 petition.
Even unregistered immigrants must file taxes
An undocumented immigrant is anyone who has entered the United States without verification or has expired a visa. But even if a person does not have legal status, they are still required to pay taxes. Undocumented immigrants often find it easier to avoid income tax. After all, payments are often made in cash. But you can pay income tax even without a social security number. You can get an individual tax identification number (ITIN) to the IRS to file your taxes.
If you don't have paperwork, you have a good reason to pay taxes. Paying taxes falls under the notion of good moral character - this is the criterion for obtaining various immigration benefits. If you qualify for these immigration benefits in the future, paying taxes will help build your moral character.
Cancellation of expulsion from the country
In some cases, an unregistered immigrant may receive a green card as a result of canceling expulsion from the United States. Certain individuals may be entitled to cancel expulsion after they have been deported. This right is available to a non-permanent resident of the United States with any immigration status that meets all of the following requirements:
- has lived (permanently physically present) in the United States for at least 10 years; and
- during this time was a man with good moral qualities; and
- has not been convicted of certain crimes or has not violated certain laws; and
- expulsion can lead to “exceptional and extremely unusual difficulties” for a spouse, parent or child of a foreigner who is a US citizen or legal permanent resident.
As a rule, a successful cancellation of an expulsion case also leads to the immigrant receiving a green card. However, things can be more complicated than just meeting the requirements. The number of available green cards is limited, and the immigration judge has the right to make such decisions at his discretion. Thus, providing sufficient evidence (including paying taxes) is a good start to demonstrate that you are honest and deserve to be allowed to stay in the United States and get a green card.
Tax filing may play a role in future immigration reform
There is a possibility of future immigration reform that will one day affect millions of undocumented people in the United States. It is expected that after its adoption, the two main obstacles to obtaining the right to legal immigration will be physical presence and good moral character. The history of tax returns is evidence of both of these requirements.
Income Requirements for Sponsoring Family Members
If you want to help a family member immigrate to the United States and get a green card, you will need to act as a sponsor and file Form I-864, Affidavit of Support. This document is required for most family immigrants and some presumed employment-based immigrants to show that they have adequate financial support and are unlikely to become a burden to society. This is a contract between the sponsor and the US government in which the sponsor promises to support the prospective immigrant if he or she is unable to do so on their own.
As a sponsor, you must provide evidence that your income is at least 125% of the federal poverty level (with some exceptions). The federal tax returns filed with the IRS are your historical proof of income.
On the subject: 6 ways to get free tax filing assistance
Help with tax preparation
Not everyone is required to file a tax return annually. The amount of income that you can get before filing a tax return depends on the type of income, your age and your filing status. In the publication IRS 519 “Tax Guide for Immigrants” Many common tax issues for immigrants are addressed. If you are unsure of your obligations, several resources are available:
- Internal Revenue Service
Some individuals may be able to prepare and file a tax return free of charge through IRS website.
- Online tax preparation
Private companies such as TurboTax.com, H&R Block и TaxSlayer.com offer specialized tax data preparation software services. Depending on your tax requirements, fees will vary. In some cases, you can prepare for free.
- Professional Services
Personal tax preparation is available in various options. Large systems like Liberty tax, H&R Block и Jackson Hewitthave offices throughout the United States. Small businesses with experienced Certified Public Accountants (CPAs) and Registered Agents (EAs) are also usually located nearby. For example, MYRA offers tax training and other services for immigrant families.
Many people who have not been able to register taxes in the past are happy to know that they should receive a tax refund after they finally file the documents. Regardless of your immigration status, it is important that you get a general idea of your tax obligations and how they affect you based on immigration law. And as always, if you are not sure how your actions will affect your immigration status, contact a specialist.
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