It is income tax season once again. Every year people flock to tax professionals in an attempt to get the most money possible. However, in doing so, it is important realize that seeking the biggest refund may not be the best long-term strategy. All taxpayers -and particularly immigrants-should be careful only to work with knowledgeable and reputable tax preparers. There are some in the community who offer tax services promising big and quick refunds. But if it sounds too good to be true, it probably is. Those large refunds may come as a result of misinforming the government about your personal information. Fraud committed by these preparers on your return could cost you a lot down the road.
So pay close attention to your tax returns. Ask questions and make sure you understand exactly what the preparer is stating to the government. It is important that you only give the government truthful information. Make sure that the people you are claiming as dependents truly qualify as dependents, and all business income or losses are accurate.
Sometimes unscrupulous tax preparers will encourage you to claim many of your relatives as your dependents - who may not actually qualify as dependents- for tax purposes in order to receive a larger return. It is important to be careful with this because it could have serious immigration consequences.
And finally, keep copies of all your records. Whether filing for citizenship, sponsoring a relative, proving physical presence in the United States, or countless other situations, it is common for immigration officials to request proof that an immigrant has paid taxes.
Everyone should keep a copy of tax returns and all attached filings in a safe place for future use.
Again, Federal Income Tax laws apply to citizens and non-citizens alike. Importantly, an individual does not need a social security number to file a federal income tax return. For individuals who are not eligible for one, the Internal Revenue Service will assign an Individual Taxpayer Identification Number (ITIN). Many banks and tax preparers assist immigrants in filling out the simple application for that number.
But who is eligible for a social security number? Today, a social security number will be issued to individuals with lawful immigration status in the United States. This includes anyone issued an employment authorization document (EAD). For example, as soon as an immigrant is granted deferred action for childhood arrivals, they may apply for a social security card and number at their local Social Security office.
And once you do get a social security number, be sure to contact your local social security office to insure that you are properly credited for all work under an ITIN. Also, contact the IRS to inform them that you no longer need an ITIN.
For more information about the interplay between taxes and immigration laws, or for any other immigration matter, please contact Grzeca Law Group at (414) 342-3000 or visit our website at www.grzecalaw.com.