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Why is Declaring Taxes Correctly Important for My Immigration Status?

Declaring income correctly on tax returns every year is required by U.S. law, and for American residents and citizens, this includes any worldwide income. If you are an immigrant, most immigration applications will require the production of tax records at some point in the process. False or inaccurate information on your tax returns can have a negative impact on your immigration status, which may result in delays or even a denial of an immigration petition.

Given that the USCIS officials that are responsible for reviewing and approving or denying immigration applications are employees of the Federal government, which is supported by the taxes collected each year, officers have a greater incentive to examine and review tax returns carefully.

Moreover, the immigration law has several sections that regulate how much income must be earned and reported on tax forms to support employment-based immigration petitions and family-based residency applications.  Therefore, it is extremely important to have your tax returns properly prepared and filed each year.

What are Some of the Most Common Errors People Make on Their Taxes that Can Affect Their Immigration Status?

Common mistakes immigrants make when filing their taxes to be avoided:

1. Misstating or using incorrect filing status:
   • If you are married and living with your spouse, you cannot file as single.  
   • If you and your spouse are both working, then you likely cannot be head of household.  
   • If you live with the other parent of your children and you both work, you will not likely qualify as “head of household.”
2. Improperly Claiming Dependents:
   • Declaring dependents who are not dependents according to the definition in the tax code is improper—for example members who are not residing in your house or living outside the United States, generally cannot be claimed as dependents.
   • There are specific conditions that must be met for a person living in your house to be a dependent. Make sure that you review these carefully with your accountant or tax preparer.
3. Under reporting or not reporting income.
   • All income, including cash earnings, must be reported by law
   • Reporting unrealistically low income for your household size can trigger investigations.  For example, if you have a household of four persons and you are claiming less than $10,000.00, or an extremely moderate income, this will be questionable and can lead to greater scrutiny.

How Can I Declare Taxes if I am Paid in Cash and I Do not Have a Social Security Number?

Even if you do not have a W-2 (wage and tax statement) from an employer, you can still declare all of your earnings during a given year in your tax return and pay the corresponding taxes.  If you do not have a social security number, you may be able to obtain a Tax ID number (ITIN) and use this number instead to file your tax return.

You will probably be required to pay all the taxes owed on your earnings, since your employer has most likely not withheld or deducted any taxes from your wages, given that you have not been paid through a payroll system.

What is an Individual Tax ID Number (ITIN), What are its Benefits, and How Do I Get One?

An Individual Taxpayer Identification Number (ITIN) is issued by the Internal Revenue Service (IRS) to track tax payments made by individuals who do not have a Social Security number. The main benefit of having an ITIN is that it allows someone to declare and pay taxes, even if their income was reported under an invalid Social Security number.

Having an ITIN can also help demonstrate that a person has lived in the United States for a specific period of time, which may support eligibility for certain immigration benefits such as cancellation of removal. This may also serve as evidence of work experience when applying for an employment-based green card, or help show an employer’s ability to pay the required wages when sponsoring an employee for legal permanent residency.

To obtain an ITIN, you must file Form W-7 with the IRS and include proof of your identity, such as a copy of your passport. The IRS will mail your ITIN to you, typically within one to two months.

Reporting Foreign Income on Tax Returns in the U.S.

U.S. citizens and legal permanent residents are legally obligated to pay taxes on world-wide income.

Non-immigrants and virtually all other individual who remains in the United States for a period of time, generally 183 days or more in any tax year, may be required to pay taxes on world-wide income as well.

It is important to note that not all foreign income is subject to taxation in the U.S.  For example, there is a foreign earned income exclusion, that may allow you to exclude from your taxable income in the U.S., your foreign earnings received as reasonable compensation for services rendered, for up to an amount that is adjusted annually for inflation (i.e. $126,500 for 2024, $130,000 for 2025, $132,900 for 2026).  There are also other exclusions and deductions, such as the foreign housing deduction or exclusion.

The U.S. has numerous tax treaties that diminish or eliminate the financial liability associated with the declaration of foreign income and it is important to utilize a tax attorney or accountant that is familiar with these tax treaties when preparing your taxes, if you have worked abroad or have world-wide income to declare.

Additionally, it is important for U.S. citizens who are residing abroad to properly declare their foreign income with the IRS, because if they ever want to sponsor a family member to come to the U.S. as a resident, they will be able to use their income listed on their U.S. tax returns as evidence that they can support their family member in the United States.

What Can I Do if I Have Incorrectly Filed My Taxes in the Past?

If you’ve made mistakes on previous tax returns, you can file amendments to correct them.

This is important for your immigration status as taxes are reviewed by immigration officials who will be making a discretionary decision on whether to approve your case. In addition, these may be necessary for any future immigration benefit you seek for either yourself or a family member.

Be prepared to pay any owed taxes to resolve discrepancies, as you will be responsible for paying back any taxes which should have been paid if the taxes were filed correctly in the first place.

Our Experienced Immigration Lawyers Are Here to Help

Call 617-303-2600 (Ext. 0) to schedule an appointment with one of our knowledgeable Boston immigration lawyers if you need help with obtaining legal immigration status in the U.S.  You may also request your appointment online.