What You Should Know About Your Immigration Status and Taxes
If you are living in the U.S. and you earn income over a certain amount, you are required to file state and federal income tax returns that detail the income you earned that year and pay any taxes that are due. The Internal Revenue Service (IRS) is the federal agency in charge of collecting federal taxes and Tennessee has a Department of Revenue that collects state taxes.
Before we go any further on a topic as complex and individualized as taxes, we’ll remind you that this article is for informational purposes only. For guidance on your specific situation with regard to taxes and your immigration status, talk with your immigration attorney and your accountant.
What is your tax status: Resident or Nonresident Alien?
The IRS taxes residents and nonresident aliens differently, so the first step is to determine what your tax status is. You may be required to pay US income taxes even if you are not a US citizen. Your tax status is what determines whether or not you are required to pay taxes in this country.
Resident aliens follow the same tax code as US citizens. If you are a resident alien, you must report all of your income whether it was earned in the US or internationally. The way this income is taxed is decided by the IRS depending on your specific circumstances.
Nonresidents file specific tax forms depending on the kind of income they generate.
Individual Tax Identification Number
If you can’t get a Social Security Number, the IRS will issue you an Individual Taxpayer Identification Number (ITIN). This is a number that is used only for tax processing, and it is available regardless of your immigration status. This number helps you fulfil your legal requirement to file an income tax return.
How to file your Taxes
For those filing for the first time you might consider working with an accountant who is familiar with the tax code and can answer the many questions you will have. You can visit your local library to find out about getting free help filling out your tax forms. You will be required to fill out different forms if you are an employee or if you are a contractor. Your tax professional can help you select the proper forms to file.
The Affordable Care Act (ACA) Tax Penalty
For the 2015 tax season, if your immigration status makes you ineligible to buy health insurance through the Affordable Care Act marketplaces, you are not required to pay the tax penalty for being uninsured.
Those who are living and earning income in the United States are required by law to file an income tax return and pay whatever tax is due by April 15. Failure to do so is a criminal offense, which could lead to removal from the U.S. and it could harm your chances of becoming a resident. Make use of the many resources available to you because the tax code can be complex and confusing. Staying current with your taxes is your opportunity to contribute to the U.S. and demonstrate your willingness to comply with the law.
Taxes are always a complicated issue, but at the law office of LaFevor & Slaughter, we are here to help connect you with all of the resources you need. Contact us today to schedule an appointment with a trusted, Knoxville immigration attorney today.
As the Managing Attorney with LaFevor & Slaughter, Jason R. Hines handles new client consultations, strategic planning and implementation and represents clients in all the Firm’s practice areas.
As an attorney practicing law in Tennessee since 2009, Jason has represented clients from all walks of life in a wide range of cases in the State and Federal Courts of Tennessee. His practice areas include divorce, family law and immigration.