Taxes and immigration status: what you need to know in order not to make mistakes

For immigrants, the US tax system can be a pain in the ass. It's so complex that even most Americans have trouble filing their annual tax returns. As a rule, the fact that you are not a US citizen does not exempt you from tax liability. What immigrants need to know about taxes in America Citizen path.

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In the United States, anyone whose income exceeds a certain level must file a return with the Internal Revenue Service (IRS). This applies to green card holders and even illegal immigrants.

How to determine your tax status in the US

The IRS evaluates your status based on two criteria - the presence of a green card and the length of stay in the United States.

You are considered a resident alien subject to U.S. taxes in two ways:

• you have a green card;
• you do not have a green card, but you spent at least 31 days in the United States during the current tax period and a total of 183 days in the last three tax years.

As a resident alien, you are subject to the same tax rules as US citizens. This means that you must report all income you receive on your annual tax returns, no matter where you earn it.

On the subject: Four Tax Return Mistakes That Can Lead the IRS to Audit

A non-resident alien must also pay income tax to the IRS, but only on US-related income. It usually includes the money you earn while in America.

Correct filing of your US tax return is essential for permanent residents. You may lose your green card and naturalization rights in the future if you do not file a declaration or do it incorrectly.

Make no mistake about the status

You can file a tax return in America as a resident alien or as a non-resident. The second status may be financially more profitable, but at the same time it carries a lot of immigration risks. For example, if you have a green card and file a tax return as a non-resident, the US government may decide that you are a resident of another country and have waived your US permanent resident status.

If you filed a return or paid taxes in another country, this is also a reason to believe that you consider yourself a resident of that country rather than the United States. Such a step could result in immigration court proceedings.

If your green card has expired, you will still remain a permanent resident of the United States. This saves you the responsibility to file your tax return and pay your taxes.

When naturalizing, they will definitely check the porridge tax history

If you do not file taxes while you have a green card, you may lose your permanent resident status. And if you are lucky, they will not notice this and will retain your right to a green card, then this will still come up during naturalization. To be eligible for naturalization, you must demonstrate "high moral character." When you file Form N-400, Application for Naturalization, you will have to answer specific questions about filing taxes. If USCIS believes that you have evaded your tax obligations in any way, you will likely be denied naturalization.

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If you are planning to apply for naturalization and have not filed or paid taxes, then it is possible to solve the problem. Agree with the IRS on a payment plan (called a compromise offer) and start making overdue tax payments. At the naturalization interview, show the USCIS officer a letter from the IRS detailing the payment plan, as well as receipts for payments already made.

If you have not paid taxes, it will be difficult to remove the conditionality from the green card

If you moved to America on a fiancee (groom) visa or after marriage to a US citizen or green card holder, you must also pay taxes. In this case, it makes sense to file a joint declaration.

Then, when filling out Form I-485 to change status (obtaining a green card by marriage), you will need to prove that the marriage is real. Tax documents in this case are crucial. USCIS will check your tax returns (for any applicable years) to make sure they were filed jointly.

After two years of marriage, you will need to file Form I-751, removing the conditionality from your green card. And again you will have to prove that the marriage is not fictitious. Filing a tax return jointly is one of the most powerful pieces of evidence.

Even illegal immigrants make sense to pay taxes in the US

The fact that you do not have legal status in the United States does not exempt you from taxes. You can pay taxes in America even without a Social Security Number (SSN). You can get an Individual Taxpayer Identification Number (ITIN) from the IRS to file your tax return.

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If you are in the US illegally, you have a very good reason to pay taxes. Paying taxes falls under the concept of “good moral character.” And this can help avoid deportation and get relief from the immigration court.

Cancellation of deportation

Sometimes an illegal immigrant can get a green card by canceling the removal. Deportation Cancellation is available to US residents of any immigration status as long as they qualify all the following requirements:

• has been living (permanently physically present) in the United States for at least 10 years;
• all this time he was a man of good moral character;
• has not been convicted of certain crimes and has not violated certain laws;
• Removing that person would result in "exceptional and highly unusual hardship" for that person's spouse, parent or child. An important condition in this case is that the spouse, parent or child must be a US citizen or a green card holder.

Family immigration and taxes

If you want to help a family member immigrate to the US and get a green card, you need to act as a sponsor. To do this, fill out Form I-864. As a sponsor, you must provide proof that your income is at least 125% of the federal poverty level. Federal tax returns filed with the IRS are the most obvious proof of income.

On the subject: How to get a transcript from the IRS so that you don't make mistakes on your return

Getting help

Not everyone is required to file an annual tax return. The amount of income you can earn before you need to file a tax return depends on the type of income, your age and filing status. Therefore, before submitting a declaration, an immigrant should contact professionals.

My CPA Tax Solutions Inc. is a full-service accounting firm. Its specialists will professionally prepare your declaration and advise on obligations, deductions and loans. Besides, My CPA Tax Solutions Inc. helps with opening / closing a business in America, financial management and provides other accounting services.

Contacts of My CPA Tax Solutions Inc:

• New York: (718) 360-5337
• Florida: (407) 401-9255
• Fax: (718) 928-3852
• Email: [email protected]

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