How to file income tax for new immigrants

What are taxes?

Taxes are a certain amount of money you must pay the government. They are collected by the federal, state, county, and city governments. Taxes help the government pay for the services it provides, including social security, medicare, education, and transportation.

There are different types of taxes, including income tax, sales tax, and property tax. You pay taxes if you earn money, spend money, or own property in the USA.

What is income tax?

Income tax is the amount of money you owe the government based on how much money you earn every year. Income taxes are usually withheld from your paycheck and sent to the government.

You pay income tax to the federal government and most state governments. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming do not collect income tax.

Every year, you must calculate how much you earned and how much income taxes you owe. You will need to report it to the government in a form called a tax return.

You must file your taxes even though your employer is already reporting to the government how much you have earned. Filing helps make sure everything is correct and allows you to get claim deductions and credits to save money.

Income tax forms

Employee with W-4

If you filled out a W-4 tax form when you were hired, income tax is usually taken out of each of your paychecks. You will receive Form W-2 from your employer at the beginning of each year. The W-2 shows how much money you earned and how much money you paid in taxes for the previous year.

Many people have already paid their income tax in full through their paycheck deductions. Others might still need to pay the government more money. If you paid more than you owe in tax, you may get money back. This is called a refund.

Self-employed with W-9

Self-employed people do not have taxes taken out of their paychecks. If you provide a W-9 form to those you work for, you will receive a 1099-MISC Form from everyone who paid you $600 or more.

Some self-employed people who are freelancers, independent contractors, or owners of small businesses pay a self-employment tax. This is calculated based on their net earnings or profits.

Income tax rates

The specific amount of income tax you owe depends on your tax bracket. You have to pay anywhere between 10% and 37% of your income in taxes depending on your income and filing status. Federal tax rates may change each year.

Your filing status is based on whether you are single or married. If you are married, you can choose to file jointly with your partner. Filing jointly usually means you can pay less in taxes than filing separately.

Tax credits and deductions

You can save money on your taxes by using tax credits and deductions.

Tax credits lower the taxes you owe and could even help you get a refund. They include the Child Tax Credit for families with children and the Earned Income Tax Credit for those with lower incomes.

Tax deductions lower the income you are taxed on. There are two ways to do this:

• Standard deduction: a fixed amount set by the government that varies by filing status. Most people choose this option and it is easier.
• Itemize deduction: requires you to list out all expenses such as mortgage interest and donations. You must have enough deductions to make this extra work worth it but it can offer greater savings.

How do I file my tax return?

Federal income tax is collected by the Internal Revenue Service (IRS) and goes to the U.S. Treasury. State income tax goes to state revenue departments. Find IRS tax information in different languages.

Follow these steps to file your tax returns:

1. Find out if you need to file taxes. Generally, you need to file if your income is over a certain amount. For 2024, that amount was $14,600 if you are single and $29,200 if you are filing jointly. This amount changes each year and is different if you are over 65. 

2. Collect your tax forms and information.

• Social Security or ITIN number
• Dependents information
• Earnings statements (Form W-2, W-2G, 1099-R,1099-Misc)
• Form 1099-G for any taxable unemployment compensation
• Forms 1099 for interest and dividend statements from banks
• Last year’s federal and state returns
• Expenses for deductions
• Information for tax credits
• Bank account routing and account numbers for direct deposit

3. Decide how you want to file your taxes. The IRS recommends filing electronically using an online tax preparation service. Many people use a paid e-file service, such as TurboTax or H&R Block. These services file and pay your federal and state taxes all in one place. Some have a free version as well.

You can also file your tax return by mail. Processing paper tax returns may take weeks longer than forms filed electronically.

4. Fill out and submit your federal tax return (Form 1040) and state tax return. It is important to make sure you list all of your income and give true information.

Income taxes are due each year on April 15th.

5. Pay taxes you owe to federal and state governments.

• You can pay the IRS electronically or by check or money order.
• If you can not pay your taxes by the due date, you may be able to set up a payment plan.
• If you need more time to file your return, you can request an extension. You will still need to estimate and pay your taxes by the original due date.
• If you do not pay your taxes on time, you may have to pay extra fees and interest.

What should immigrants know?

The IRS has two categories for people who are not citizens: “resident aliens” and “nonresident aliens”. “Resident aliens” file taxes the same way as U.S. citizens.

You are considered a “resident alien” and must file taxes if:

• You are a lawful permanent resident (Green Card holder)
• You were physically present in the USA for 31 days this year and 183 days in the past 3 years

If you do not have a social security number:

You can apply for an Individual Taxpayer Identification Number (ITIN) with Form W-7. The IRS does not share information with immigration authorities. Your information is confidential and used just for tax purposes.

Using an ITIN and paying your taxes can:

• Help you get tax credits, such as those that offer money back to families and people with low income.
• Help with your immigration application or case by showing you are contributing.

If you are undocumented:

If you earn income in the United States, the law says you must pay taxes even if you are not a legal resident. You can use an ITIN to pay taxes.

Paying taxes when you are undocumented can help show you have “good moral character.” Good moral character is important if you apply for a cancellation of removal, a Green Card, or another immigration program in the future.

If you have a nonimmigrant visa:
You may or may not have to file federal taxes depending on whether you are considered a “resident alien.” If you spent over 183 days in the U.S. over 3 years, you may have to report your income. If you are not sure if you have to file taxes, reach out to an immigration lawyer. 

More tips for immigrants:

• You must tell the truth on your tax return. False information on your tax returns can get you deported.
• You are required to pay income tax even if you are living abroad.
• You have to report foreign income if you are a “resident alien.”

How do I get help filing taxes?

Filing taxes is a complicated process. Many organizations offer free or low-cost help preparing taxes and explaining tax credits.

The Volunteer Income Tax Assistance (VITA) program offers free tax help. VITA helps people who earn $67,000 a year or less, people with disabilities, and people with limited English. Find the nearest help by using the VITA locator. Many places offer help in Spanish, Arabic, Chinese, and other languages.

Other organizations offering trustable help include United Ways MyFreeTaxes and AARP Foundation Tax-Aide Services.

IRS Free File offers guided tax preparation for those who earned $84,000 or less.

You can also use Direct File to file taxes free directly with the IRS and get guided help in 25 states.

If you need to contact the IRS:

• English and Spanish: 800-829-1040
• Other languages: 833-553-9895

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