How to File Taxes as a New Immigrant

Hello Johnie,

You may or may not know that you have to file your taxes. In this post, I will show you how to file taxes as a new immigrant.

As if the learning curve was not steep enough, I found out I had to file taxes a few months after I moved. What????.

I thought I had all my taxes taken from my paycheck. Fair, square, and done. I was moving on to other things I had to learn. The government already took out taxes, so I paid all my taxes, and if I had my taxes deducted from my paycheck, the government already has a record of my taxes, so why do I need to file my taxes? Why am I seemingly doing the same thing twice?

There is a concept called tax season and a reason for this. In this blog post, I will go over what it is, why it is important, and how to file taxes as a new immigrant. It turns out that it is not as bad as I thought and can have some upside, especially when you first move here. Read on to find out.

Tax Season!!!

Filing taxes is crucial to living and working in the United States. It is how you report your income, expenses, and other relevant financial information to the government. The United States (US) operates on a self-assessment system, which means individuals are responsible for accurately reporting their income and deductions to the Internal Revenue Service (IRS). You see, the tax code in the United States is complicated, and the taxes removed from your paycheck are only an estimate of your tax liability. Everyone’s tax liability is different, depending on their situation. The Internal Revenue Service (IRS) is the federal agency responsible for administering the tax laws in the United States, and when you file your taxes, you file them with the IRS.

First, you have to make sure you have your Social Security Number. If you have an SSN already, read on. If not, see this post on how to get a social security number.

Who needs to file taxes?

Not everyone who lives in the US needs to file taxes. The general rule is that you must file taxes if you have a filing requirement. Filing requirements are based on your income and filing status.

Income- For the 2022 tax year, you must file taxes if you have earned a minimum of $12,950 in income as a single person. If you made a minimum of $ 5$ and are filing as ‘married, filing separately’ (see below), you must file taxes. See here for official information from the IRS.

Filing Status- Your filing status affects whether you have a filing requirement linked to your age and income. There are five different filing statuses: single, married filing jointly, married filing separately, head of household, and qualifying widow(er). Your filing status will determine the amount of income you need to have for a filing requirement. Here is the official IRS guide.

While not everyone is required to file taxes (see the picture above and information on the IRS website), there are benefits to filing your taxes, and you should consider filing taxes anyway to reap these benefits.

The number one reason why tax season is a ‘fun season’ is refunds!!! As I mentioned before, the taxes withheld from your paycheck as an estimate are often higher than your actual tax liability. Your tax liability is determined by many factors written into the tax code- the allowances you selected on your W-4 form, how many children and dependents you have, your tax filing status, whether or not you are a business owner, etc. The full scope of how your tax liability is determined is out of the range of this blog post. Suffice it to say that the majority of people overpay. This means filing your taxes helps to assess your actual liability and ensures you neither overpay nor underpay. You will receive the excess amount you paid as a refund! So, tax time is money time!

Filing your taxes also ensures you report your income accurately, including other earned income you may have. Besides your regular employment income, you may have other sources of income, such as self-employment income, rental income, or investment gains. These additional sources of income need to be reported on your tax return to calculate your overall tax liability accurately.

Access Benefits and Credits: Filing taxes is often a requirement to access various benefits and credits offered by the government. For example, you must file a tax return to receive the Child Tax Credit, the Earned Income Tax Credit (EITC), or certain healthcare subsidies.

To comply with the Law: Filing taxes is a legal obligation for all individuals in the United States, regardless of their immigration status. Therefore, it is literally illegal for you to not file your taxes. Failing to comply can result in penalties, fines, and other legal consequences. By filing taxes, you fulfill your civil responsibility as a taxpayer and demonstrate your commitment to following the law.

Documentation for Future Proof: Filing taxes provides a documented record of your income and financial transactions. This information can be important for applying for loans, obtaining a mortgage, renting a property, or even applying for citizenship in the future. It helps establish a transparent financial history and demonstrates your financial stability.

File your taxes!

When and How Do You File Your Taxes?

The deadline for filing your taxes each year is usually April 15^th or the following Monday if this day falls on a Saturday. However, you can request an extension if you need more time to file your taxes. The deadline for requesting an extension is October 15th. You file taxes in the new year for the previous tax year. Next year, 2024, we will be filing taxes for 2023, i.e., your 2023 taxes. Yes, read that again; slower if you have to. It wasn’t initially obvious to me, but it makes sense after some thought.

There are two ways to file your taxes: paper or electronically. I recommend you file electronically first because it is better for the planet, and second, it is faster and more efficient than paper filing.

Now that we have all the clerical matters taken care of, these are the steps to file your taxes:

Determine your filing status: Your filing status (single, married filing jointly, married filing separately, head of household, or qualifying widow(er)) will affect your tax rates and deductions.

Gather necessary information: This includes your Social Security number, W-2 or 1099 forms, and any supporting documentation for deductions or credits.

Choose a tax preparation method: You can prepare your taxes manually using paper forms (not recommended), utilize tax software, or seek professional assistance from a certified public accountant (CPA) or tax preparer. You can also file for free using the Free File Alliance.

Complete your tax return: Fill out the required forms, including Form 1040 (US Individual Income Tax Return), and report your income, deductions, and credits accurately. If your CPA or a tax preparer is filing your tax return for you, you give them your documents, and don’t worry about this step.

Review and double-check: Ensure your information is accurate and complete before submitting your tax return.

Submit your tax return: File your tax return electronically using the IRS e-file system or mail a paper return to the appropriate IRS address.

Pay any taxes owed or claim a refund: If you owe taxes, make a payment using one of the available payment methods. Alternatively, if you are entitled to a refund, you can choose direct deposit in your bank account (recommended) or receive a paper check.

Keep copies and records: This is very important! Keep copies of your tax return, supporting documents, and relevant records for at least three years in case of audits or future inquiries.

Personally, I used and still use a CPA to fill my taxes because understanding the US tax code is out of my jurisdiction. I do not want to make any mistakes; frankly, I do not have time or interest to learn the US tax code.

Another note on tax filing. For tax filing purposes, you are categorized as either resident or non-resident for tax purposes regardless of your visa status. This matters because it determines whether you pay certain taxes or are exempt. Fewer taxes equals a higher refund. You are a resident for tax purposes if you meet the green card or substantial presence test.

There you have it, Johnie. You have all the information you need to file your taxes (get yo money!), fulfill your tax obligations, and contribute to the growth and prosperity of your new home country. I hope you now feel empowered to tackle tax filing with confidence. I recommend you seek professional help; staying current on tax laws is their job and not yours.

Go forth and prosper!

Please leave your questions and comments below.