Millions of people live with a dream of immigrating to the US. To them, immigrating is the most difficult part, but in reality, it is the easiest part. The real difficulty starts when you become subjected to all the federal laws once your immigration procedure ends.
If you are a new US immigrant, then your sweet night’s sleep will be soon disturbed by abbreviations like SSN or ITIN, acquiring the alien tax identity, and taxation laws for US resident and non-resident aliens. However, you don’t need to worry much about these issues once you are able to handle them effectively.
Have a look at a few important things you need to know for paying all the taxes you are liable for.
Social Security Number
Social security number (SSN) is of great importance for individuals living in the US. It is a form of tax identity that is needed for filing a federal income tax return. SSN is usually issued to US citizens for tax purposes. You may also apply for a SSN if the US Department of Homeland Security has given you a permission to legally work in the country.
Individual Taxpayer Identification Number
If you are not eligible to apply for a SSN, then you need to get an individual taxpayer identification number (ITIN). It is a number issued to US non-resident aliens for processing their tax returns in the absence of a SSN. ITIN will serve as a substitute of SSN in case of tax purposes only. It is important to note that this number does not make you eligible for enjoying all the benefits that a SSN can provide.
Internal Revenue Service (IRS) has a set criterion for determining your tax status. You will be considered a US resident alien for tax processing in a particular year if you meet either the green card or substantial presence check. You need to contact the IRS for understanding their mechanism and getting your tax status as a resident alien.
Taxation for Resident Aliens
The taxation processing is different for resident and non-resident aliens living in the US. According to US tax law, a resident alien is subjected to taxes, same as a citizen of the US. This means that if you have a resident alien status, then you should report all the sources of your income on a federal tax return; these sources may be within the territory of the US or external.
But if you are filing a tax return as a non-resident alien, then you need to mention the US income source only. You are also required to mention all the amounts on your tax return in US dollars.
Once you have legally immigrated and start living and working in the US, you need to pay taxes for whatever you earn. So, for properly filing your tax returns in compliance with US tax laws, you need to apply for a tax identity before the beginning of a new tax season.
Whether it is a SSN or an ITIN that you need for successful tax processing, go ahead and apply for your tax identity. Paying taxes regularly is the only way in which you can enjoy your dream of living in the US for a longer duration.
5 Things You Need For Your Tax Return Preparation
There are numerous options available for an American taxpayer to file a federal income tax return. If you have a modest earning, don’t own a house or play around with huge capitals, then you can file a tax return online while sitting at home.
But if you are a businessman, manage some property on rent, or if you make a healthy income through your investments; then the tax situation may be rather complex for you. In that case, you need to take help from a tax professional who will help you get the most out of tax deductions and minimize your overall tax load.
For a successful visit to a local tax preparer’s office, you need to make some preparations. Have a look at what you should bring to the office of a tax professional.
You must have a photo ID to prove that you are going to file a tax return for yourself. A driver’s license, military ID or your passport can serve the purpose well. In addition, you need to show your Social Security card to the tax preparer and the cards of all those for whom you need to claim an exemption.
If you do not have a Social Security card, then you must obtain an individual taxpayer identification number (ITIN) before preparing for your tax return. An ITIN can be obtained from the Internal Revenue Service by submitting an application.
If you have certified identity proofs and documents that verify your foreign status, then these tax professionals can help you apply for an individual taxpayer identification number and file your tax returns simultaneously.
Proof of Income
Generally, you are issued an income statement at the end of each year from your income source. Your employer will provide you with a W-2 Form that contains the details of every penny you earned in a particular year. This is the proof of your income and you need to attach a copy of this document to your tax return. If you are self-employed, then you have to report your income yourself on a form 1099-MISC issued by the IRS.
You must report all your incomes on a tax return, even those for which you do not get an income statement; like hobby income. In that case, you should bring receipts, pay stubs or other proofs for each source of income as well.
Proof of Expenses
Your purpose behind visiting a tax expert is to prepare your tax return and to maximize your itemized tax deduction. These tax experts require you to keep all receipts of your expenses as can help you shrink your tax burden. So when visiting these professionals, make sure that you bring the receipts and proof of all your expenses to claim maximum deduction in your tax return.
Proof of Some Unexpected Losses
There are special tax deductions for people who become subjected to theft, disasters or other unexpected loss of money. If you are a victim of any such incidents, then you must bring the related documentation to the tax preparer’s office.
Hopefully, the above information will help you prepare yourself for an appointment with a tax professional. Your first visit will prove to be a success if you take all the required documents with you.
If you want to apply for an, Individual Taxpayer Identification Number, or ITIN tax number and have any other questions, please feel free to contact us at 888-509-3616. If you have any suggestions please share those with us as well. Freedomtax ITIN Number has a professional team of IRS Certifying Acceptance Agents, and tax accounting professionals with more than 16 years of experience, helping immigrants with their ITIN application. Freedomtax can also help immigrant entrepreneurs incorporate a business in the USA. Freedomtax ITIN Tax Number Online services provides Quality, Professional Service with a Family Feel.