Immigration and taxes have a lot to do with each other. In our Atlanta, Georgia CPA firm, we assist individuals and immigration attorneys with tax issues that arise during the USCIS immigration application process.
When do taxes come into play when applying for immigration status?
Applying for a Green Card for a Spouse
A US citizen applying for a green card for their spouse will need to prove that their marriage is valid. One of the best ways to do this is by presenting a copy of a jointly filed US tax return to USCIS.
USCIS also uses the tax return to prove that the US citizen spouse earns enough money to support the non-resident spouse. The key number to look at in the tax return is “adjusted gross income,” which should be above the poverty threshold. This is reported on Form I-864, Affidavit of Support. The US tax return should be attached to this form.
Green Cards need to be renewed periodically. When doing so, the married couple should attach their jointly filed US tax return to the renewal application. The joint tax return is an important proof to USCIS that the marriage is continuing and legitimate.
The non-citizen spouse may use an ITIN (Individual Tax Identification Number) when filing a joint tax return. The ITIN is easier to get than a SSN (Social Security Number).
Taxes and Applying for Citizenship
USCIS does not want applicants who are applying for citizenship to owe taxes to the US government.
US taxes are subtracted from pay checks. This is called “withholding.” If the taxpayer is an independent contractor or owns a business, then taxes should be paid quarterly.
Any tax still owing at the tax return due date is paid when the tax return is filed. This is typically April 15 of the following year, although the due date may be extended 6 months upon request, to October 15.
Immigration and Taxes – Common Issues
Unlike many other countries, the US taxes worldwide income. That means that citizens and Green Card holders must pay pay US tax on their income, no matter in which country it is earned. However, a foreign tax credit for taxes paid in the non-US country is usually available.
US citizens and Green Card holders who have an interest in a foreign bank account with a value over $10,000 must report the account to the US government on a FBAR (“Foreign Bank Account Report,” also called FinCen Form 114). Foreign assets that produce income (including foreign stock) may also require reporting on Form 8938.
Other forms that may need to be filed are Form 5471, for interest in a foreign corporation, or Form 8865, for interest in a foreign partnership.
Significant penalties may apply if these forms are not filed.
Non-resident individuals (those without a Green Card) are required to pay US tax only on US source income. In such cases, it is important to carefully evaluate the source of the income and any applicable tax treaties between the countries.
Taxes and Authorization to Work
USCIS will not penalize a non-US citizen who works in the US without a work permit and files a joint US tax return. Therefore, it is almost always best to file a US tax return due to the requirements of both the IRS and USCIS.
If a tax return was not filed because of a missing work permit (or any other reason), the return may be filed late. Penalties and interest may apply. For both tax purposes and immigration purposes, a late return is better than no return at all.
If you or someone you know has a tax issue relating to immigration, filing tax returns for an individual or a business, or any other matter, please contact us at (678) 235-5460, or by email at Gary.Massey@masseyandcompanyCPA.com.
We represent taxpayers to the IRS and the state Department of Revenue. We are licensed to represent taxpayers in Georgia, as well as any other state. We make the tax nightmare go away.
Founded by Gary Massey, Massey and Company CPA is a boutique accounting firm located in Atlanta providing tax and accounting services to small businesses and individuals throughout Georgia, and across the US. Our office is in Sandy Springs, a suburb of Atlanta, Georgia.
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