Tax Obligations for New Immigrants: A Complete Guide

Moving to the United States brings many opportunities, but it also comes with tax obligations that can be confusing for new immigrants. This comprehensive guide will help you understand your responsibilities and rights.

Understanding Your Tax Status

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Resident vs. Non-Resident for Tax Purposes

Your tax status depends on:

Green Card Test: If you're a lawful permanent resident

Substantial Presence Test: Based on days present in the U.S.

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First-Year Choices

New immigrants may have options for their first year:

Elect to be treated as a resident for the entire year

File as a dual-status taxpayer

Filing Requirements

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Who Must File

You must file a U.S. tax return if:

Your income exceeds the filing threshold

You're married filing separately with any income

You have self-employment income over $400

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Important Forms

Form 1040: Standard individual tax return

Form 8843: For exempt individuals and individuals with medical conditions

Form 3520: For foreign trusts and gifts

Income Reporting

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Worldwide Income

U.S. residents must report worldwide income, including:

Foreign employment income

Foreign business income

Foreign investment income

Foreign rental income

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Foreign Tax Credit

Avoid double taxation by claiming:

Foreign Tax Credit (Form 1116)

Foreign Earned Income Exclusion (Form 2555)

Common Deductions and Credits

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Available Deductions

Standard deduction (often better for new immigrants)

Itemized deductions if they exceed standard deduction

Above-the-line deductions (student loan interest, IRA contributions)

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Tax Credits

Child Tax Credit: Up to $2,000 per qualifying child

Earned Income Tax Credit: For lower-income families

American Opportunity Tax Credit: For education expenses

ITIN vs. SSN

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Individual Taxpayer Identification Number (ITIN)

Required for tax filing if you don't have an SSN

Apply using Form W-7

Renew if it hasn't been used in three years

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Social Security Number (SSN)

Preferred for tax purposes

Required for certain credits and benefits

Apply at Social Security Administration

Banking and Financial Accounts

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FBAR Requirements

Report foreign accounts if:

Combined balance exceeds $10,000 at any time during the year

File FinCEN Form 114 electronically

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FATCA Reporting

Form 8938 required if foreign assets exceed:

$50,000 (single) or $100,000 (married) on last day of year

$75,000 (single) or $150,000 (married) at any time during year

State Tax Considerations

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State Residency Rules

Each state has different rules for:

Establishing residency

Filing requirements

Tax rates and deductions

Common Mistakes to Avoid

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Filing Errors

Not reporting worldwide income

Missing FBAR or FATCA deadlines

Incorrect tax status election

Not claiming available credits

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Documentation Issues

Poor record keeping

Missing foreign tax documents

Inadequate proof of deductions

Getting Professional Help

Consider professional assistance for:

Complex immigration status situations

Significant foreign assets or income

First-year tax filing

State tax complications

Important Deadlines

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Key Dates to Remember

April 15: Individual tax return deadline

June 15: FBAR filing deadline

October 15: Extended return deadline

Resources and Support

Elite Tax Consulting Services specializes in immigration tax issues and can help you:

Determine your correct filing status

Maximize deductions and credits

Ensure compliance with all requirements

Plan for future tax years

Don't navigate immigration taxes alone – contact our experts today!