Tax laws in the U.S. can be daunting even to people who deal with them on a regular basis, so it is not surprising that people who are not particularly knowledgeable about taxes get confused about them. People who happen to be immigrants in the U.S. might not know how tax laws apply to them or how to go about complying with any laws and regulations so that they do not place themselves at risk of legal problems.
Of course, the IRS expects all tax residents to pay every single penny of the taxes that they are liable for; because of this, reporting all sources of income is mandatory, regardless of whether that income is a result of work or business inside or outside U.S. borders. That does not mean that all of that income will be taxable, but the IRS does want to know about it in case it is.
Tax residents are people who are U.S. citizens by birth, naturalization, and even legal permanent residents. Some visa holders might be considered tax residents such as those who are engaged in a trade or business inside U.S. borders. There are various circumstances that will require non-U.S. citizens to pay taxes and it is a good idea to be aware of them. The federal government considers people to be either tax residents or not. Although contacting an immigration lawyer to find out whether you have to file for taxes or not can be a bit confusing, you have to figure it out because failing to file taxes if you are required to do so can get you into a lot of trouble.
Taxes for Green Cardholders
According to government figures, there are more than 13 million green card holders (legal permanent residents) in the U.S. If you have just recently been granted a green card, you might be wondering whether you have to file a tax return or not and how other tax laws apply to you.
As we mentioned, the federal government does consider legal permanent residents to be tax residents and that means that you are obligated by law to report all of your income to the IRS whether you earn it inside or outside U.S. borders. You might have heard that what determines whether you are a tax resident or not is the number of days that you have been on U.S. territory but that is only the case for people who enter the country with nonimmigrant visas and not for those who hold valid green cards.
Again, having a green card makes you a tax resident and you must report any income from any source to the IRS; in fact, even if you spend the entire year outside of U.S. borders, the law still requires you to report all of your income. Green card holders, like most taxpayers, have to file IRS Form 1040 every single year by the 15th of April.
People who for one reason or another cannot file by that date can file Form 4868 for an automatic 6-month extension. However, if you fail to file your taxes at all, you could be placing your chances of becoming a U.S. citizen in the future; plus, you could be charged with a crime for intentionally not filing your taxes as the law requires you to do so and that can end with your green card being revoked and possibly even deportation. With all of this in mind, you can see why filing your taxes on time is very important if you happen to be a green card holder; but if you still have doubts, talking to an experienced attorney can help you to resolve them.
Taxes and People With Nonimmigrant Visas
Countless people arrive at U.S. ports of entry on a daily basis. People who enter the United States with the intention of staying for a short period of time for tourism, business, medical treatment, temporary work, or other purposes are granted different types of nonimmigrant visas. As anyone who has ever gone through the process of obtaining a nonimmigrant visa will tell you, it is not exactly easy.
Although green card holders are required by federal law to file their taxes, people with nonimmigrant visas usually do not have to. Generally, a person who is within U.S. territory has to spend at least 183 days of the current year in the U.S. before being required to file taxes. B
ut there are situations in which nonimmigrant visa holders who have spent less than 183 days of the current year in the U.S. will be required to file their taxes. For example, according to the “weighted” system, if you have spent 183 “weighted” days or more in U.S. territory during the last three years, including more than 30 during this year, then you are considered to be a tax resident and have to file taxes accordingly.
The Weighted System
As with any other government regulations, there are always people who seek to “beat the system” in one way or another. For example, a person might spend 180 days during one year inside the U.S. then leave for the remainder of the year before coming back in order to beat the 183-day rule that would require him or her to file taxes. The weighted system seeks to avert such practices.
According to this system, days are counted differently toward the 183-day limit. Days that correspond to the current year count as 1 day as you might expect, but days from the previous year count as one third (1/3) of a day, and days from the year before that count as one-sixth (1/6) of a day. Once it all adds up to 183, the person in question becomes a tax resident and must report all domestic and international income to the IRS for taxation purposes. Some people enjoy exemption from this rule such as some government employees and students.
Legal Assistance Never Hurts
All of these rules and others can get somewhat complicated, even for people who have dealt with them before, so it is definitely a good idea to get help and as much information as you can about them. One of the things that you can do in order to learn more about immigration and paying taxes is to visit the IRS’s official website and take a look at Form 519, U.S. Tax Guide for Aliens, which will help you to understand this subject a lot better.
Since failing to file your taxes or to report taxable income can lead to criminal charges, a loss of your immigration status, possible jail time, and possible deportation it should be taken very seriously.
It would be an excellent idea to contact an experienced attorney who can take a closer look at your particular case and fully advise you about what your obligations and responsibilities as an immigrant truly are when it comes to paying taxes. You would certainly not want to risk the U.S. status that you have worked for so hard and the future possibility of becoming a citizen just because you did not file your taxes as you were supposed to.