5 TAX TIPS FOR U.S. IMMIGRANTS

While becoming a United States citizen is a dream come true for most immigrants, it also comes with many responsibilities, including paying taxes. However, fulfilling your tax obligations can be daunting as you may be unfamiliar with the process, and the forms to fill, such as 1040 and W-8BEN. Read on for five tax tips for U.S. immigrants.

The IRS requires that all lawful permanent residents in the U.S. pay taxes. This applies when you meet the substantial presence test, have a green card, and sometimes are a visa holder. It is worth noting that you do not have to live in the United States full-time to become a resident for tax purposes. 

According to the IRS, if you have lived in the US for 183 days in the past three years, or 31 days or more a year, you are considered to have a substantial presence and you should pay taxes.

Once you establish that you are a tax citizen, you should start filling out the suitable tax forms. The right forms to fill out depend on whether you are in the country on a temporary visa or a green card holder.

An individual in the country on a temporary visa should file tax returns using Form 1040-NR, also known as the U.S. Nonresident Alien Income Tax Return. However, if you are a green card holder, you should use Form 1040, officially known as the U.S. Individual Income Tax Return.

You could also fill out the form W-8BEN if you are subject to withholding taxes at a 30% tax rate on amounts accrued from US sources.

Taxes can also affect you if you immigrate to the United States through marriage to a permanent resident or a U.S. citizen. If you moved to the U.S. as a spouse or fiance, you should file taxes jointly with your partner. 

To adjust to permanent status under marriage basis when filing Form  I-485, you will have to prove that your marriage is legitimate. Providing tax documents proving that you filed taxes jointly with your partner along with other documents can help prove that your marriage is genuine.

Some of the expenses you incur are often written off against your taxable income, meaning that less of your payment will be subject to taxation. For instance, expenses incurred when caring for senior or child dependents can also help you earn tax credits. Be sure to determine areas you may qualify for tax deductions or exemptions to increase your savings.

If you continue to receive income from properties and investments outside the United States, you should consider reporting it on your tax return. Be sure to fill the Statement of Foreign Financial Assets (IRS Form 8938) separately from the tax return to declare your overseas income. By reporting your income from outside the country, you avoid doubling your tax obligations. 

Paying your taxes is an excellent way to show that you comply with the United States federal tax law and prove that you are of good moral character, especially if you intend to apply for citizenship. Implement the above strategies to make filing your tax returns more straightforward.