With a green card, you can live in the United States, explore new job opportunities or even start small businesses. But residing in a new country also comes with many changes. One of the biggest challenges you may face is understanding and complying with complex U.S. laws and processes, like paying taxes.
Why immigrants struggle to pay taxes
As you settle into life in the U.S., you may face several challenges that make filing taxes more complex. Among these concerns are:
- Complicated tax processes: Learning the tax system of a new country can be challenging, especially since there are different processes for residents and noncitizens. Moreover, some rules and restrictions only apply to immigrants.
- Language barriers: If you have trouble with English, it might be harder for you to understand tax forms and directions.
- Financial issues: Moving to a new country can make finding a job or ways to make money challenging. Without a permanent source of income, you may not afford your taxes.
- Lack of identification requirements: You must get an ITIN and a Social Security Number before paying taxes. However, system backlogs and complex processes may make it more challenging to obtain them.
- No access to professional help: Seeking the help of an accountant or tax preparer to help you sort out your taxes may be out of your budget.
Mistakes on tax returns can result from a lack of understanding of tax laws. However, these mistakes may subject you to penalties.
Consequences of tax mistakes
The IRS requires everyone to correctly file and pay taxes. Common errors, such as missing Social Security numbers, using the wrong filing status or misspellings, may put your status at risk if not corrected immediately. Penalties can range from monetary fines to jail time, depending on your violation.
You have three years to fix your tax return. The IRS may overlook tax mistakes if you have an acceptable reason and do not intend to defraud the government.
However, underreporting income, incorrectly claiming dependency exemptions and other forms of tax evasion fall under crimes involving moral turpitude (CIMT). A single CIMT conviction may send you out of the country.
If you have made mistakes or need help with tax filing, consider talking to an immigration attorney. They are familiar with the challenges immigrants face and may help you correct your tax filing errors before it is too late.