Skip to main content

Paying taxes as an immigrant

It is required that all immigrants in the US pay and file their taxes, whether they are here legally or not.

Burton Frank Landau | Jan 10, 2020

Before You Move To Florida…

Florida's Advantages Whether you are considering a move from another US state or from as far away as Russia, for many the advantages of coming to Florida outweigh the risks. Here is a list of four of the most-cited legal and tax attractions that potential Florida residents need to know. 1. Non-residents Can Form a Company The procedure for a foreign citizen to form a company in the United States is the same as for a US resident. It is not necessary to be a US citizen or to have a green card to own a corporation or limited liability company formed in Florida. 2. No State Income Tax Florida is a US state that does not collect individual income tax. While residents still have Federal income tax liabilities, the reduced tax burden makes it one of the most attractive US states for those looking for lower tax jurisdictions. 3. Property Tax Appeals In Florida, all property-owning residents have a right to appeal their property taxes. The deadlines to appeal your real estate taxes vary by Florida county, ranging from September 2 to 18. 4. The Homestead Tax Exemption In the state of Florida, a $25,000 property tax exemption is applied to the first $50,000 of your property’s assessed value if your property is your permanent residence and you owned the property on January 1 of the tax year. Florida's Pitfalls There are, however, many circumstances where some of the advantages might not apply. Here are three legal and tax matters that potential Florida residents need to be aware of. Limited Liability Companies (LLCs) and Corporations do not qualify for the Homestead Tax Exemption in Florida If you rent out a homestead property for more than 30 days for two consecutive years or for more than six months you lose your homestead exemption. Foreign Nationals who sell a commercial or residential property in Florida are required to withhold (for tax purposes) 15% of the amount realized on the sale It is important to hire a local business and real estate attorney to ensure that you can take advantage of the legal and tax benefits while avoiding the pitfalls. A skilled lawyer can also advise you on how to navigate your move to Florida, potentially saving you significant amounts of money in fines, liens and interest. If you are considering making Florida your primary or secondary home, contact the attorneys of South Florida Law, PLLC today at 954 900-8885.

Daniele Petkovicz-Tedesco | Oct 18, 2017

How to answer a request for Initial/Further Evidence from USCIS

First things first -breathe! ....then read their letter! Although you don't necessarily need an attorney to help you with an immigration application, I recommend you use one. Immigration Law is in the top 3 most complex areas of law in the United States. More than filling out forms, attorneys specialized in Immigration know how the answers can trigger grounds of inadmissibility and removal. Plus, with immigration sometimes you have only one chance to present your case. There are some assertions made in the immigration forms that hard or even impossible to overcome. So, with so much at stake, it is important to prepare and present your case right from the beginning. Even when you did it right to start with, you may receive a request for more evidence. It can be a simple thing, but many people get nervous and panic. They forget to read the whole letter. So, my first advice is: take a deep breath, and after you calmed down, read the whole letter. Immigration usually acknowledges the information they received from you initially, and then tell you what they want. They give you examples of the documents they are looking for as evidence you qualify for the benefit you applied for. The answer can be as simple as sending them what they asked for. You may even find out you forgot to send something initially, and that's why they are asking for it. So follow the directions in their letter. Do not forget to put the letter they sent you above all of the documents you are sending them as a response. Make a copy of the whole packet for your records. And mail it with tracking. Immigration receives thousands of mail every day, so things can and get lost, unfortunately. If you have your proof the package was delivered, then you are justified to request they give you more time to re-send the response, or to request a reconsideration of their denial for lack of response. Believe me, it has happened! What if you already sent everything you had? ...or you don't have what they are asking for? This is where it can get even more complicated. Many times, immigration will request more evidence, even though you already sent everything you have. You may even think what you sent should have been enough... But they decide it, so you must answer their request. Take this as chance to really argue your case. This may be your only chance. Review what you already sent before, explain how that proves your case and explain why you do not have any of the other evidence they are requesting. You may really need the help of an experienced attorney who specializes in Immigration Law. There is no cookie-cutter in the immigration world. Every case, just as every person, is singular; and relationships are different. An attorney who knows how USCIS works, has experience and knowledge of the law can make or break your case. Sometimes, when evidence is not available, you can use affidavits to cover a point. For example, you may have to explain why you don't have any joint bills with your spouse... I had a client who was in his 4th marriage, had been living at that home for 20 years. He did not think he would have to show his marriage was legitimate, so he did not worry about adding her name to any bills. Plus, everything had been set up years ago and there was no point in changing it. The home was paid in full, so there was no mortgage. He purchased the home decades before they even met, so he did not want to put her name on the title of his home. She did not have a social security number, and was not employed, so she didn't have a way to show she was living there. But they had letters, and some invitations friends sent to them. So we had to be creative. We prepared an affidavit from the husband explaining how it was impossible to add her name to any bill without her having a social security number, and how the property was acquired prior to the marriage, so that's why she was not in the title. He had the nickname he had for her tattooed on his arm, so he told the story behind the tattoo. We took a picture of his tattoo and sent it with the affidavit. We also had letters from plenty of people who knew them as a couple, including his grown children... All of these things together, were enough to convince the immigration official that he was in a committed relationship to the applicant. The officer probably figured it is less painful to take someone's name out of your joint account, than to get rid of a tattoo! Now, if you decide to contact an attorney to help you respond to an RIE or an RFE: get organized. Make sure you don't wait until the last minute, as the attorney may charge you a premium to expedite the work. Make sure you bring the letter and a copy of the application you sent in to start the process. And bring all evidence you have, let the lawyer decide if something is not relevant. Think of people who have personal knowledge of the things you need to prove, call them to ask if they are ok with your attorney contacting them. Follow your attorney's instructions. They are there to help you!

Deanna D. Clark-Esposito | Aug 6, 2017

Global Trade Compliance: 5 Tips to Avoid Engaging in an Unlawful Export

Tip #1: Ask Yourself if There Are Any "Red Flags" to the Transaction Depending on the good or service being exported, there may be restrictions or obligations that flow under the export administration regulations (EAR) or the Office of Foreign Assets Control (OFAC) which must be adhered to by an exporter regarding the end-use, end-user, or the ultimate destination of the export. To avoid accidentally facilitating exports that may be violative, i.e., could lead to penalties or even jail time, you should ask if there is anything suspect about the transaction, such as an unusual routing request, or a cash payment for a large sum that would ordinarily be subject to financing or a payment plan. Tip #2: If "Red Flags" are Identified, Inquire Further While there is no obligation to unnecessarily pester your customer where no "red flags" have been identified, in the event one or more has been there is an affirmative duty under the EAR to make inquiries around the suspicious circumstances. This is because based upon this information, it is determined whether or not you can proceed with the transaction. Tip #3: Don't Have to "Selective Hearing" People hear what they want to hear and conversely, don't hear what they don't want to hear. In the case of export compliance, cutting off the flow of information to avoid hearing certain details about a transaction should never be done or encouraged, as this could be considered an aggravating factor in an enforcement proceeding by the government. Be sure to leave the lines of communication open and not make statements that either expressly, or impliedly, suggest that limited information regarding the ultimate destination, end-use, or end-user is sought. Tip #4: Have Written Protocols for Handling "Red Flags" Having written parameters as part of your export compliance program on how to check for, deal with, and resolve transactions to which "red flags" are presented is key to avoiding unlawful shipments and the risks that can accompany them. Since one employee's actions can be imputed to a company thereby making it liable for a violation, it's important to have clear policies about export compliance and measures in place to prevent a breakdown in diligence. Tip #5: Examine the Findings About a Suspect Transaction and Re-Evaluate Where a "red flag" can be justified or reasonably explained, then the transaction may proceed. Where the information simply cannot be reconciled however, don't allow it to proceed because in the event the shipment turns out to have been unauthorized under the EAR, the government will likely consider you as having had "knowledge" about the nature of the unpermitted status, but nonetheless allowed the transaction to happen anyway.

Martin Musinguzi | Apr 28, 2016

Top 6 Things You Must Know about Individual Tax Identification Numbers (ITINs)

First things first, What is an ITIN? - It was created for tax purposes. The ITIN program was created by the IRS in July 1996 so that foreign nationals and other individuals who are NOT eligible for a Social Security number (SSN) can pay the taxes they are legally required to pay. - ITINs are not SSNs: The ITIN is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, for example 9XX-7X-XXXX. They are not Social Security Numbers (SSNs) and as such ITINs do not bestow allow the owner access to social welfare benefits. - Many immigrants have ITINs. People who do not have a lawful status in the United States may obtain an ITIN. In addition, the following people may obtain an ITIN even though they are lawfully in the U.S and must pay taxes but may not be eligible for a SSN: ? A non-resident foreign national who owns or invests in a U.S. business and receives taxable income from that U.S. business, but lives in another country. ? A foreign national student who qualifies as a resident of the United States (based on days present in the United States). ? A dependent or spouse of a U.S. citizen or lawful permanent resident. ? A dependent or spouse of a foreign national on a temporary visa. Do ITINs provide legal status or work authorization? - An ITIN does not provide legal immigration status and cannot be used to prove legal presence in the United States -on the other hand, it can prove length of presence in the U.S and more critically - the Good Moral Character (GMC) requirement that most Aliens must show in the process of adjusting their immigrant status. - An ITIN does NOT provide work authorization and cannot be used to prove work authorization on an I-9 form. ITIN holders pay taxes. - ITINs let more people pay into the system, which builds the tax base. In 2010, over 3 million people paid over $870 million in income taxes using an ITIN, and according to the IRS, ITIN filers pay $9 billion in payroll taxes annually. - Unauthorized immigrants paid $11.8 billion in state and local taxes in 2012. This ranged from roughly $3.2 million in Montana (home to only 6,000 unauthorized immigrants) to $3.3 billion in California (with an unauthorized population numbering 3.1 million). ? ITIN holders are not eligible for all of the tax benefits and public benefits that U.S. citizens and other taxpayers can receive. For example, an ITIN holder is not eligible for Social Security benefits or the Earned Income Tax Credit (EITC). However, if that person becomes eligible for Social Security in the future (for example, by becoming a lawful permanent resident), the earnings reported with an ITIN may be counted toward the amount he or she is eligible to receive. - ITIN holders are eligible for the Child Tax Credit (CTC). The CTC tax credit may be worth as much as $1,000 per qualifying child, depending upon the applicant's income. Because ITIN holders are eligible for the CTC, over 4 million U.S. citizen children benefit from the tax credit. Can ICE or the government use ITINs to track unauthorized immigrants? No! - The ITIN is not an immigration-enforcement tool. The application process is designed to facilitate tax payment, and the fact the IRS does not share applicants' private information with immigration enforcement agencies is key to tax compliance. - Taxpayer privacy is an important cornerstone of the U.S. tax system. Because applicants provide the IRS with a great amount of personal information, privacy is highly critical to the success of the program. Section 6103 of the Internal Revenue Code states that the IRS is not authorized to release taxpayer information to other government agencies except for providing information to the Treasury Department for investigations that pertain to tax administration, or under a court order related to a non-tax criminal investigation. Expanding information-sharing beyond this would require a new law--an issue that arises often during legislative debates. What other purposes can an ITIN serve? - Opening an interest-bearing bank account. Individuals who do not have a SNN but do have an ITIN can open interest-bearing bank accounts. - Securing a driver's license. Some states have allowed the ITIN to be used instead of a SSN in order to receive a driver's license, driver's permit, or state identification card. - Providing proof of residency. At some point in the future an immigrant may need to prove how long he or she has been in the United States and having a tax return filed using an ITIN is one way to show that. How does one apply for an ITIN? - Applicants must fill out a W-7 application form and submit it to the IRS along with a completed tax return. Individuals do not need to apply in person. When the application is approved, ITINs are sent to applicants through the mail. - Applicants are required to submit original documents verifying identity and "foreign status." The IRS has issued a list of 13 documents that will be accepted for this purpose. Those documents will be returned to the applicant within 60 days of receipt and processing of the W-7 form. - There are IRS Acceptance Agents ( https://www.irs.gov/Individuals/Acceptance-Agent-Program ) and Taxpayer Assistance Centers ( https://www.irs.gov/uac/Contact-Your-Local-IRS-Office-1 ) available to help persons apply.

J. Bradford Flecke | Feb 6, 2016

Pre-Immigration Tax Planning

Home Country Pre-Immigration Tax Assessment This is the foundation for the whole process: get accurate information about income and assets. Identify income sources and amounts worldwide. Identify asset locations, amounts, and ownership. Identify current and future tax liabilities as a tax resident. Making no changes at all, what happens to my tax situation, if I become a nonresident? What happens to my tax situation if I become a nonresident and the kind and/or amount of income I produce and where I produce it change? What changes can I make in the how/when/where I receive income and hold assets in order to reduce my tax as a nonresident of my home country? Pre-Immigration US Tax Situation Identify current and future tax liabilities as a tax nonresident of the United States (currently and in the future, assuming no immigration to the United States). What happens to my tax situation if I suddenly become a US tax resident, with income and assets as they are now, pre-immigration. What changes can I make in the how/when/where I receive income and hold assets in order to reduce my tax as a nonresident of the United States, without increasing my home country tax? Assess Post-Immigration US Tax Scenarios With reference to the worldwide income and assets previously identified, determine current and future tax liabilities as a US tax resident, having immigrated in each US immigration category under consideration. How can the kind and/or amount of income I produce and where I produce it change as a US tax resident, assuming each of the US immigration categories being considered? What changes can I make in the how/when/where I receive income and hold assets in order to reduce my tax as a US resident? Develop a Game Plan Weigh the tax advantages and disadvantages, in both countries, of pursuing each of your US immigration options. What are the other, non-tax oriented, advantages and disadvantages of each of your immigration options? What can be done (in terms of changing how income is received and how assets are held worldwide) to reduce tax liability? Which changes are worth pursuing in terms of time, cost, convenience, and persona/family factors? Look at the information you gathered, the comparisons you have drawn, and the lists you have made. If you have multiple immigration options open to you, one option should stand out as the runaway best one. You may wish to perform a similar analysis of your estate planning situation in both countries. Once you have done the income tax (and perhaps estate planning) analysis, you are ready to make a choice regarding your immigration options. Now, with an immigration goal in mind, decide how and when to make changes to your income and assets, in coordination with the execution of the steps of your immigration process. The availability and the value of some tax planning techniques will depend on your tax residency status in one or both countries. So the timing of different steps in your immigration process may be critical to implementation of some your tax saving techniques. Using Professionals When it comes to deciding which tax techniques to pursue (how and when to change things about income and assets) and the timing of the implementation of those tax techniques, it is time to engage a home country tax professional and a US tax professional (or a dual country tax professional) for help. Those professionals could be tax attorneys, tax-oriented accountants, or CERTIFIED FINANCIAL PLANNER(TM) practitioners. These do not need to be long-term engagements, just long enough for the professionals to understand your tax situation, help you identify suitable tax techniques, work out the timing for the implementation of those techniques, and then coordinate with your immigration attorney (or you, if you are handling your own immigration matter), until you have immigrated and implemented all of the tax techniques in your plan. Conclusion Tax planning can be as simple or as complex as you want it to be. There are basic tax saving measures that one can identify by following the steps in this guide, after getting a basic understanding of the tax systems of the home country and the US through publicly available materials. These materials are often available on tax-related government websites. Most important in getting a good basic understanding of cross-border tax planning is reading about tax residency and nonresidency in each country and how each country treats the income and assets of residents versus nonresidents. Pre- and post-immigration tax savings opportunities (and tax paying responsibilities) should be readily apparent. Additional online research about tax planning and tax saving techniques in both countries may be worthwhile. Though you should consult with tax professionals in both countries for tax planning, the time you spend answering the questions and completing the tasks in this guide will help you become a more valuable and better informed participant in your own tax planning.

Matthew Lenza | Jan 17, 2016

Understanding NY's 529 College Savings Plan

What is a 529 Plan? This type of account, named for Section 529 of the Internal Revenue Code, enables you to reduce your taxable estate while earmarking funds for the higher education of a grandchild (or any other family member). Funds contributed to such accounts are invested to pay for a grandchild's college tuition, room and board, or other expenses. The account funds are usually invested in mutual funds, and earnings from these accounts are tax-free. Who can open a New York Direct Plan account? The NYS Direct Plan has no income restrictions and is open to U.S. citizens or resident aliens with: A valid Social Security number or other taxpayer identification number, and A U.S. address (that isn't a post office box). The beneficiary (or student) must also be a U.S. citizen or resident alien with a valid Social Security number or taxpayer identification number. You don't have to live in New York to participate. Most importantly, this means that you do not have to be a parent or a grandparent to open a plan for a loved one. You can be an aunt, uncle, cousin, godparent, friend or neighbor so long as you meet the criteria listed above. Can a beneficiary use the funds to pay for tuition at any college or university? Generally, if a school has been assigned a federal school code by the Department of Education, it's an eligible institution under Section 529. According to the IRS the funds can be used at any "eligible educational institution", which is defined as "any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education." Important to note is that the language specifically includes vocational or postsecondary institutions. This means that even if your beneficiary decides to enter a trade rather than attend college the funds are likely going to be available so long as they attend training at an eligible institution. In terms of location, the money from your account in the New York Direct Plan can be used at any eligible postsecondary school in the United States and abroad. Can the funds be used for anything other than general tuition? In addition to tuition, the funds can also be used for: Certain room-and-board expenses. School Fees. Books. Supplies and equipment required for enrollment or attendance NEW - computer technology, related equipment and/or related services such as Internet access. What are the tax advantages of the plan? New York State taxpayers can deduct up to $5,000 ($10,000 for a married couple filing jointly) of contributions to their New York Direct Plan account from their state taxable income each year. This may be subject to recapture in certain circumstances such as rollovers to another state's plan or nonqualified withdrawals. However, contributions are not deductible for federal income tax purposes. Note: Only the account owner may take advantage of the tax deduction for his/her contributions to his/her account. To be deductible for the current tax year for New York State income tax purposes, contributions sent by mail must be postmarked by December 31. What about Gift and Estate taxes? You can contribute up to $14,000 a year (or $28,000 if married filing jointly) without incurring gift taxes. Or you can choose a special election that allows you to treat a single $70,000 contribution ($140,000 for married couples) as if it were made over a 5-year period. Gifts in excess of these amounts may be subject to federal gift tax. For more information on this, consult a qualified tax advisor. Assets in a 529 plan are not counted as part of the donor's gross estate for estate tax purposes