Immigration & Taxes: Three Thing Should Know Before You File Taxes
As you know, the tax filing deadline has been extended until July 15, 2020 due to the Coronavirus Pandemic. This issue will discuss how your taxes can impact your immigration status or your ability to help a loved one with their immigration status.
Specifically, we will explore:
1. The Role of Taxes in Immigration Cases
2. Two Common Tax Mistakes That Can Impact Your Case
3. Potential Solutions to Discuss With Your Tax Professional
The Role of Taxes in Immigration Cases
Taxes are important because they contain information that could strengthen or discredit your immigration case. For instance, your taxes can be used to confirm your marital status, annual salary, household size, and home address. If the information on your immigration filing is not consistent with the information reported on your taxes then it could negatively impact your case. It may result in an investigation, request for more evidence, or even a denial. I have seen many cases where the client discovered mistakes or false information after they received a notice from immigration asking for further explanation. Here are a few examples: the applicant’s marital status was single or head of household instead of married filing jointly; the address on the applicant’s taxes was different from the address used in the immigration filing, or the name and/or number of dependents were inconsistent. Therefore, it is very important that you review your taxes and use a reputable tax professional that will prepare your taxes with accuracy and integrity.
Two Common Tax Mistakes That Can Impact Your Case
As discussed above, taxes can be used to support or discredit your immigration case. One common mistake is not filing your taxes or under-reporting your annual income. The tax transcripts are used to verify an applicant’s financial ability to support the beneficiary so they do not become dependent on public benefits. When you file a petition for a relative, you must submit proof of income which usually includes 3 years of tax transcripts, an employment verification letter, or recent paystubs. Your taxes should accurately reflect your annual salary because it will determine whether you are financially able to file for your relative or whether you will need a co-sponsor. Your application can be denied if you cannot prove that you earn enough money to support the beneficiary, especially with the current heightened scrutiny on the public charge rule.
Another common mistake is not paying your tax bill. This is can have negative consequences when you apply for citizenship. One component of your citizenship application is proving that you have a good moral character. Not filing or paying your taxes (or other obligations i.e. child or spousal support) could lead to your citizenship application being denied. So before you apply, please make sure that you do not owe Uncle Sam!
Potential Solutions to Discuss With Your Tax Professional
As discussed above, your taxes can be used to confirm your marital status. One problem applicants may face is proving that they are married when their spouse resides abroad. Most people in that situation either file as single or head of household which may cause an issue down the road. However, depending on your circumstances you might file married filing separately. You should discuss your tax filing status options with your tax professional.
Another common issue is how to file taxes if your spouse does not have a social security number. If your spouse does not have a social security number they can apply for an Individual Tax Identification Number (ITIN). The ITIN is strictly for tax purposes and allows individuals (including foreign nationals) to file taxes in the US. Historically, the IRS’ main concern is enforcing tax law and they are generally not interested in your immigration status. For immigration purposes, filing taxes can have a positive benefit on your moral character by showing a good faith effort to pay taxes despite your immigration status. As you can see, immigration and taxes are complex topics that could have negative consequences if you do not seek the proper advice. Therefore, we urge you to seek specific legal and tax advice that addresses your specific situation.