TurboTax / Tax Calculators & Tips / All Tax Guides / General Tax Tips / A Tax Guide for U.S. Immigrants

A Tax Guide for U.S. Immigrants

Updated for Tax Year 2015


OVERVIEW

One of the most significant learning curves immigrants must climb is the U.S. tax system. Fortunately there are a few key points that can make the filing process easier.


For immigrants freshly arrived in America, everything they face is new: the customs, the currency, and for many, the language and even the climate. Yet one of the most significant (and confusing) learning curves they must climb is the U.S. tax system. Fortunately there are a few key points that can make the filing process easier.

Everyone files

Many immigrants have paid taxes on their income for years in their countries of origin but have had no direct experience with income taxes. For a number of these people, the government withholds taxes from their pay and “that's the end of it,” says Nancy Chavez-Porter, a native of Peru who also has lived in Mexico. They don’t file returns and never see refunds, she explained. They must learn that in the U.S., everyone with income above certain levels is expected to file a tax return, explained Chavez-Porter, who leads a company called Latina Business Services, in Colorado.

W-4s determine how much you owe

One of the first things new arrivals must learn about taxes in the United States is the purpose of IRS Form W-4, says Lee Shainis, Intercambio’s executive director and cofounder, and author of the book "The Immigrant Guide: What Every Immigrant Needs to Know." This form helps employers figure out how much to withhold from an employee’s paycheck to cover the federal income tax.

Deductions save you money

Chavez-Porter recalls talking to a young man who had come from Mexico not long before. Accompanied by his family, he showed her his tax form from the previous year. She asked why he didn't file with them, and he explained that they, too, were from Mexico and that he had been told he could file tax returns only for himself because just he had a Social Security number and a work visa. She told him that he could get tax identification numbers for them and add them as dependents. No one at the company where the man worked as a skilled technician had told him about the deductions he was entitled to. That year, he got $4,000 back.

Social Security and Medicare

Chavez-Porter also tells new immigrants about Social Security and Medicare deductions from their checks. Usually, she says, “They don’t care about that – they just care that, ‘If I make $10 an hour, my net is $8.50.” She explains to them that employers usually withhold state and local taxes too, and that it’s not as complicated for self-employed people to file tax returns as they might think. New immigrants might not be interested in Social Security and Medicare now, she says, but those programs can become valuable to them when they retire. Filing yearly also can help in the process of becoming a citizen, she notes, because a history of paying taxes proves that they have been contributing members of American society.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • Filing Deadline: IRS filing deadline for tax year 2015 is April 18, 2016 (except for residents of Massachusetts or Maine, where the IRS filing deadline for tax year 2015 is April 19, 2016).
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected 3/18/16. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected 3/18/16. Prices subject to change without notice.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except the TurboTax Home & Business/QuickBooks Self-Employed bundle offers.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice service is available via phone for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2014 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.