Understanding the U.S. Tax System: A Guide for Immigrants

For many immigrants, navigating life in the United States includes understanding a completely new tax system. Whether you have just arrived or have been living in the U.S. for some time, it is important to know the basics of how taxes work. Filing taxes properly is not only a legal obligation, but it can also help you build a stronger financial foundation.

Below is a general overview to help you understand what to expect during tax season.

Do Immigrants Need to File Taxes?

Yes. In most cases, individuals living in the United States who earn income above a certain amount must file a federal tax return each year. This applies to many immigrants, regardless of immigration status.

The standard deadline to file taxes is April 15 each year. If this date falls on a weekend or holiday, the deadline may be adjusted.

To file a federal tax return, you will need one of the following:

• A Social Security Number (SSN) if you are authorized to work in the United States

  
  

• An Individual Taxpayer Identification Number (ITIN) if you are not eligible for an SSN

Even individuals who are not authorized to work may still need to report income and file taxes using an ITIN.

How Does the U.S. Tax System Work?

The United States uses a progressive tax system, which means that the more income you earn, the higher the percentage of tax you may need to pay. Income is taxed in brackets, so only the portion of income that falls into each bracket is taxed at that rate.

For example, the first portion of income is taxed at the lowest rate, and only the amount above certain thresholds is taxed at higher rates. Tax brackets vary depending on your filing status, such as single, married filing jointly, or head of household.

Understanding Deductions and Tax Credits

Tax deductions and credits can help reduce the amount of income that is taxed or the total amount of taxes owed.

Some common deductions and credits include:

• Medical expenses

  
  

• Education costs or student loan interest

  
  

• Charitable donations

  
  

• Childcare expenses

  
  

• Retirement account contributions

  
  

You may choose to take the standard deduction, which is a fixed amount set by the IRS each year, or itemize deductions if that would result in a greater tax benefit. The option that is best for you will depend on your specific financial situation.

Important Note

This post is for general informational purposes only. It is not tax advice. Every person’s financial and immigration situation is different. Filing incorrectly or missing important tax benefits could lead to problems with the IRS or affect future immigration applications.

Please consult a licensed tax professional to receive advice tailored to your circumstances.