Personal Finance

Tax Filing Tips for U.S. Immigrants

The law requires that immigrants should pay taxes. Filing taxes allows U.S immigrants to comply with federal tax laws, enjoy tax benefits including Child Tax Credit, document working and present history in the United States, and insurance premium tax credits for children who are U.S. citizens.

Good tax filing history can prove good moral character for those hoping to apply for U.S citizenship or undocumented immigrants applying for green cards. Failure to pay taxes deliberately may result in tax evasion, a crime punishable by law. The tax filing process may be a daunting one for U.S. immigrants. However, the following tips may be of great help.

1. Fill out the correct forms

Green card holders use a similar form to the U.S. citizens; form 1040, officially known as the U.S. Individual Income Tax Return. Temporary visa holders use form 1040-NR, formally the U.S. Nonresident Alien Income Tax Return, to file their tax returns.

However, the nonresident aliens who may be subject to 30% withholding of U.S federal taxes on U.S.-source income are required by the IRS to fill out the W-8BEN form before their first payment. If you receive income outside the United States, fill out form 2555, also called the Foreign Earned Income, to determine your tax eligibility and the amount to exclude from your taxable earnings.

2. Determine your tax eligibility

Immigrants authorized to work in the U.S. usually pay similar federal and state income taxes as residents do. The Internal Revenue Service (IRS) conducts two tests to determine if you’re eligible to pay taxes, including the green card test and the substantial presence test. The IRS’s definition of residency differs from the U.S immigration law.

If you pass either of these tests, you’re considered an alien resident, meaning you’re subject to similar tax rules as U.S. citizens. If you’re a nonresident alien whose income is connected to the United States, you must pay taxes. You may consult a tax professional for this because it may get complicated.

3. Know your tax filing requirements

To pay taxes in the United States, you must have the Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). If the Department of Homeland Security authorizes you to work in the U.S, you’re eligible to apply for an SSN by submitting form SS-5. If you’re ineligible for an SSN, apply for the ITIN by filing form W-7.

4. Beware of social security and Medicare taxes

Income paid to resident aliens employed within the U.S. by a foreign or American employer is subject to Medicare and Social Security taxes under similar rules applying to U.S. citizens. In contrast, nonresident aliens are subject to Medicare/ Social Security taxes for services conducted within the U.S. with specific exemptions depending on their nonimmigrant status.

5. Leverage deductions

You can write off certain work-related expenses against your taxable income, meaning less of your net income will be taxed. If you incur costs caring for an elderly dependent or a child, you may earn tax credits. To approximate your federal income tax, deduct any deductions from your net income to get the taxable income. Then multiply the result by the applicable tax rates to determine your tax obligation. Subtract any tax credits to get the net income tax.


Tax payment is a legal responsibility that may result in legal consequences once ignored. If you are a U.S. immigrant, be sure to follow these tips when filing your returns.

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