Taxes and immigration status: what you need to know in order not to make mistakes
For immigrants who come to the United States, the American tax system can be a completely new and confusing concept. It is so complex that even most Americans have difficulty filing their tax returns annually. Generally, you are subject to US tax laws if you live in the United States or spend a significant amount of time here. And income tax can affect immigration status. Writes about it CitizenPath.
In the United States, anyone with income above a certain level must file a tax return. The Internal Revenue Service (IRS) is the agency responsible for collecting taxes.
Whether you are a legal permanent resident or illegal immigrant, it is important that you get a basic understanding of your tax filing responsibilities.
Are you a resident or non-resident
The IRS uses two criteria to assess your status - green card and presence. If you meet the requirements of any of these, the IRS considers you to be a foreign resident with taxable income; otherwise, you are treated as a non-resident alien.
If you have a green card, then you are a resident alien. If you do not have one and have been in the United States for at least 31 days during the current tax period and a total of 183 in the last three tax years, including the current one, you are considered a resident alien.
As a foreign resident, 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 which country you earn it in.
A non-resident alien must also pay income tax to the IRS, but only on income actually associated with the United States. It usually includes money you earn while in the United States.
Correct filing of your U.S. tax return is essential for permanent residents.
You may lose your lawful permanent resident status depending on how you file your return. It also affects your ability to naturalize as a US citizen.
Permanent resident status
There are several common ways taxes can affect your permanent resident status. First, filing a tax return as a non-resident may have some tax benefits, but it can negatively impact your immigration status.
The IRS has its own way of counting who is considered a resident. Filing a tax return with the IRS as a non-resident can lead the government to believe that you are a resident of another country and have given up your permanent residence in the United States. Talk to an immigration attorney before applying as a non-resident.
Paying taxes in another country can create the illusion that you are living in that country. One way to tackle this problem is to interview Customs and Border Protection (CBP) when you re-enter the United States. A CBP employee may ask if you received income or paid taxes in another country. If the CBP determines that you have lived in another country, you can go to the Immigration Court to review the case.
Naturalization tax history review
It goes without saying that maintaining permanent resident status is essential for naturalization as a US citizen. In addition, not filing a tax return can negatively impact your ability to naturalize. Eligibility for naturalization requires that you demonstrate good moral character. When you prepare Form N-400, Application for Naturalization, you will be asked specific questions about filing a tax return. If the United States Citizenship and Immigration Services (USCIS) believes that you have evaded your tax obligations in any way, they will most likely refuse naturalization on the basis of good moral character requirements.
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If you are planning to apply for naturalization and have not previously filed tax returns or paid taxes, then it is quite possible to solve the problem. Enter a payment plan (called a compromise proposal) with the IRS and start making payments. At your naturalization interview, show the USCIS officer your IRS letter detailing your payment plan, as well as receipts of payments already made.
The green card has expired
If your green card has expired, you continue to be a permanent resident of the United States. This way you keep the same tax filing obligations. Renew your green card by completing Form I-90, Permanent Resident Card Replacement Application. If you do not pay taxes, then this will not affect the renewal of your green card. But it can further affect future immigration benefits.
Refusal of the green card will result in the payment of exit tax
If you are considering giving up your green card and moving to another country, consult with a tax professional about the implications. Every year, some permanent residents complete Form I-407 to voluntarily renounce their lawful permanent resident status. While there may be some tax benefits, there are also large tax costs. An exit tax will be levied upon leaving the US tax system.
List your spouse when filing a declaration
Taxes can also affect individuals who have recently immigrated as a result of marriage to a US citizen or permanent resident of America. If you recently came to the United States as a bride or groom, you must file your next tax return with your spouse.
When you fill out Form I-485 to convert to permanent resident status based on marriage, you must prove that the marriage is in good faith. You will need to provide several documents proving your marriage and crucial tax documents. USCIS will check your tax returns (for any applicable years) to confirm that they were filed jointly.
After two years, you will need to file Form I-751, Petition to Waiver Living Conditions. Again, you must prove that you and your spouse are in a bona fide marriage. The filing of jointly filed tax returns is an important piece of evidence that needs to be included in the I-751 petition.
Even illegal immigrants must file taxes
Illegal immigrants are anyone who has entered the United States without a screening or has expired a visa. Despite the lack of legal status, there is still a duty to pay taxes. It is often easier for illegal aliens to avoid paying income tax. After all, payments are often made in cash. But it is possible to pay income tax even without a social security number. You can get an Individual Taxpayer Identification Number (ITIN) from the IRS to file your tax return.
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If you are illegal in the US, you have very good reasons to pay taxes. Paying taxes falls under the notion of good moral character. Being an immigrant with good moral character is very often a criterion for obtaining various immigration benefits. If you qualify for these immigration benefits, paying taxes will help build your moral character.
Cancellation of deportation
Sometimes an illegal immigrant can get a green card by canceling expulsion. Some succeed in obtaining the right to cancel the expulsion after the proceedings have been initiated. Cancellation is available to non-permanent residents of the United States with any immigration status that meets all of 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;
- expulsion will result in "exceptional and extremely unusual hardship" for the spouse, parent, or child of the alien who is a US citizen or lawful permanent resident.
As a rule, the successful cancellation of the deportation case, among other things, leads to the fact that the immigrant receives a green card. However, everything is much more complicated than just meeting the requirements. The number of available green cards is limited. Therefore, providing sufficient evidence (including paying taxes) is a good start to demonstrate that you are honest and deserve permission to stay in the United States and get a green card.
Filing Tax Returns Today May Play a Role in Future Immigration Reform
In addition, there is the possibility of future immigration reform that one day will affect millions of illegal immigrants in the United States. If ever an immigration reform is carried out, then in order to obtain a GRTN card, it will be necessary to prove the physical presence of a person in the United States and that he has shown high moral qualities. The history of filed 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 need to act as a sponsor. To do this, you must complete Form I-864. A statement of support is required for most immigrant households and some of them employed in order to demonstrate that they have adequate financial support and are unlikely to benefit from social benefits. This is a contract between the sponsor and the US government in which the sponsor promises to support the future immigrant if he or she is unable to do so on their own.
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As a sponsor, you must provide proof that your income is at least 125% of the federal poverty standards. Federal tax returns filed with the IRS are your proof of income.
- Getting help
Not everyone is required to file an annual tax return. The amount of income you can earn before you need to file your tax return depends on the type of income, your age, and filing status. IRS Publication 519, Tax Guide for Immigrants, addresses many of the common tax issues for immigrants. If you are unsure of your commitment, there are several resources available:
Some people can prepare and file their tax return for free through the IRS website.
- Online Tax Preparation
Private companies such as TurboTax.com, H&R Block and TaxSlayer.com operate websites with expert tax reporting software services. The fees are based on your tax filing requirements. But in some cases, you can prepare for free.
- Professional services
Personal tax preparation is available from a variety of options. Large systems such as Liberty Tax, H&R Block, and Jackson Hewitt have offices throughout the United States. Small businesses with very experienced Certified Auditors (CPA) and Registered Agents (EA) are also usually found in your area.
Many people who have not filed a tax return in the past are happy to find that they are owed a tax refund after they finally filed their tax return. Therefore, know your tax obligations. Again, regardless of your immigration status, it is important that you get a general understanding of your tax obligations and how they affect you under immigration law. If you are unsure how your actions will affect your immigration status, contact an immigration lawyer.
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