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Everything you need to know about US tax as an immigrant

22 Mar 2022 - Category: Blog /
tax us

Are you thinking about moving to the United States? Maybe, you’ve already arrived but now you’re searching for a job. If this is the case, then you may make your life a little easier by learning how US taxes work for immigrants today.

Taxes are often quite complicated but it is essential that you understand the basics if you want to live and work in the United States.

In this blog we’ll be exploring a number of topics to help immigrants learn all they need to know about the UX tax system, including:

  • Who needs to file taxes?
  • How do you pay taxes in the United States?
  • How do you get help to file your taxes?
  • How to send money home

Who needs to file taxes?

U.S. citizens are not the only people that have to pay taxes in the U.S. Immigrants that are authorized to work in the United States will also need to pay the same state and federal income taxes as citizens. This may be news to some immigrants so it is important that you learn as much as possible about taxes and the taxes that apply to you.

The Internal Revenue Service (IRS) is the government organization in charge of the taxation process. The IRS defines residency differently to how it is defined in U.S. immigration law which means that, for tax purposes, workers can be categorized as resident or nonresident aliens.

Let’s take a look at the difference between the two categories of residency when it comes to taxes:

  • Resident Aliens

If you are an immigrant to the U.S. the IRS will consider you a resident alien, for tax purposes, if you pass one of these tests:

  • Substantial presence test: You will pass this test if you have been physically present in the US for at least 31 days during this current year and 183 days during the three-year period that includes the current and the last two years.
  • Green card test: You will pass this test if you have received a green card or alien registration card, from the US Citizenship and Immigration Service, that allows you to permanently reside in the U.S. as an immigrant

If you qualify as a resident alien then you will have the same filing requirements as a United States citizen.

  • Non-Resident Aliens

For non-resident aliens the process is slightly different. If you are not a U.S. citizen and you also do not qualify for these resident alien tests you are only required to file a tax return if you own a business in the US or if you have a US income that wasn’t taxed enough by your employer.

Most working adult immigrants will qualify as a resident alien, so you won’t have to worry too much about non-resident alien requirements.

W-4 forms

Your employer may have asked you to complete a W-4 form. A W-4 form is used to work out the amount of money that will be withheld in taxes from your income. This form will include worksheets that help you understand how many “allowances” to claim.

To learn more about how you can file your taxes visit the official page of the U.S. government.

As you can see, the requirements around taxes are quite specific and can seem a little complicated. Now you have an idea of whether you need to file taxes, let’s take a look at the next stage and see how you can pay your taxes.

How do you file and pay your taxes in the United States?

You will only be able to file and pay taxes in the U.S. if you have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). If you are allowed to work in the US then you will be eligible to apply for a SSN before you even arrive in the US.

You can also visit your local Social Security office and fill out Form SS-5. This is the ‘Application for Social Security Card’. When you complete this form you will need to provide identification documents and evidence that you are authorized to work in the US.

If you are not eligible for a SSN then you can get an ITIN instead. To receive an ITIN you will need to submit Form W-7. You can submit this to the IRS along with documents that show your identity and that you are an immigrant.

The forms you need to file:

  • If you are a Green card holder…you can use the Form 1040 to file your taxes. This is the same form that U.S. citizens use. Usually this form is due on April 15 each year.
  • If you are on a temporary visa…you can use the Form 1040-NR. Usually this form is due on April 15 each year.

Upon filing your taxes you will receive guidance on how much tax you need to pay and when you need to pay that amount.

How do you get help to file your taxes?

Hopefully, you now have a better idea of how the tax system works for immigrants in the US. Nevertheless, it can still be a tricky process when the day comes to actually file your taxes. But don’t worry, because there are places to get extra help.

For example, the IRA has a Volunteer Income Tax Assistance (VITA) program that is designed to help taxpayers who cannot afford tax preparation. They can also help people in need of a translator or those who have any further questions about applying for an ITN.

The best way to access a VITA site is by going to the IRS Free Tax Prep site and entering your ZIP code. Through these free online resources anyone can learn how to file and pay their taxes. Alternatively, you can reach out to a qualified tax professional and receive some in-depth expert advice. They’ll be able to help you through the process and ensure that they are receiving the right deductions.

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