When we talk about taxes, the people in the US can be divided into two categories: tax residents and non-tax residents. If you have recently immigrated to the US, it is better to learn more about immigration and taxes.
Whether you are a United States citizen or not, in several situations, you are eligible to pay taxes. Your eligibility also depends on whether the government categorizes you as a tax resident or not.
If it does, you will have to file and pay taxes. For example, permanent residents and individuals who have green cards are eligible to pay taxes. Non-immigrant visa holders might be eligible to pay taxes, but some of them don’t have to pay them.
Most people suggest filing for an income tax return even if you are not a tax resident. This can help you get tax refunds if your job is withholding tax wages from your salary.
It is mandatory for United States tax residents to report their income to the IRS and also pay taxes.
Whether the money was earned abroad or in the United States, all sources of income are to be reported to the IRS.
This, in no way, means that all your income will be taxed by the United States government. Read ahead to learn more about work visa and paying taxes.
Green Card Holders
If you are a green card holder and are wondering how immigration and filing for taxes works, this is for you.
As soon as you become a green card holder, you are eligible to pay taxes in the United States and are supposed to report all your income to the IRS – whether you earned it in the US or internationally.
There is a common misconception amongst green card holders that the number of days that they spend in the United States determines whether they are eligible to pay tax or not, but this is completely untrue for green cardholders.
This is only true for people with non-immigrant visas. If you are a green card holder and have not visited the United States all year, it is still your duty to report all of your income to the IRS.
Taxpayers in the United States have to file an IRS form 1040 by April 15th every year. If you have a green card, you have to file this form, too.
If you neglect these instructions and forget to file for taxes, your process of becoming a US citizen might be hindered. If you refuse to comply with the IRS instructions, you might lose your green card and even face deportation.
Surrendering Your Green Card
If you’ve surrendered your green card and lost your permanent resident status – it does not mean that you are not eligible to pay tax in the US anymore.
You have to inform the officials that you have surrendered your green card by filing an IRS form 8854. After this, you can stop paying taxes in the United States.
Some people are still eligible to pay taxes in the US even years after they stop being a permanent resident.
Compared to green card holders, non-immigrant workers might or might not have to file for taxes and report their come to the US government.
Non-immigrant work visa holders only become eligible to pay taxes if they spend 183 days out of the whole year in the country.
For example, if you spend 45 days in the US, you won’t be eligible for taxes, but if you spend 185 days in the country, you will have to officially file for taxes.
There is also a weighted system, which means even if you spend less than 183 days in the US, you might still have to file for taxes.
If you have been in the United States for at least 183 weighted days in the past three years, you will be eligible to pay taxes. If you have spent less than 30 days from the current year in the country, then you won’t be counted as a taxpayer.
This is how the weighted system works – all days in the current year count as one day, all the days in the previous year count as 1/3 of a day and all days in the year before that count as 1/6 of a day.
If after adding all that up you get more than 183 days, you are eligible to file for taxes and report your yearly income to the IRS. This rule might not apply to some government employees and international students.
If these rules still don’t apply to you and you are paying taxes in a different country, you might not be categorized as a taxpayer in the US.
This might not always work in your favor, though. If you don’t pay taxes in the US and don’t have a tax home in a different country, the IRS might think that you are hiding your income from the US government and may ask you to file for taxes, anyway.
Similar to green card holders, if you spend more than 183 days in the United States and have a non-immigrant visa, you are eligible to file for taxes using the IRS form 1040 by April 15th every year. You also have to inform the IRS about your yearly income, whether it was earned domestically or internationally.
Failure to file for taxes or reporting your income is a criminal offense, which can easily lead to your deportation from the United States.
If you fail to follow tax laws, it can also hinder your immigration process and reduce your chances of becoming a permanent resident.
To learn more about work visa and paying taxes, visit our website or contact us today.