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United States Taxes

In the U.S., if you earn over a certain amount of money, you must pay taxes on your income. Both the federal government and the states require that you file annual income tax returns detailing your income for that year, and enclose any payment due. The Internal Revenue Service, or IRS, is the government agency charged with collecting federal taxes.

! Even if you do not owe taxes, you may still have to file a return.

! If you have had regular taxes taken out of your weekly paycheck, you might be issued a tax refund.

You must pay federal and state taxes on any income earned in the U.S. if:

  • your gross income exceeds a minimum amount determined by your age, marital status and whether you are the head of a household. See IRS filing requirements (Pub. 501) for more information.
  • your status as a U.S. citizen, resident or non-resident alien meets IRS requirements for filing

Your status as an alien -- resident, nonresident, or dual-status --determines whether and how you must file an income tax return.

  • Resident aliens generally are taxed on their worldwide income, the same as U.S. citizens.
  • Nonresident aliens are taxed only on their income from sources within the United States and on certain income connected with the conduct of a trade or business in the United States.

Am I a resident alien or a non-resident alien? Find out here.

If their income is not connected with a U.S. trade or business, non-resident aliens may be subject to a flat 30% tax or a lower treaty tax, as long as they are residents of a country with a tax treaty with the U.S. Citizens of certain countries ("tax treaty countries") are taxed on certain types of U.S. income at a lower rate or are exempt from taxation entirely.

How to File your Taxes:

Tax filing can be complicated. If you are filing for the first time, we suggest you consult with an accountant or a volunteer in your city or town to help you file. These individuals can help you with questions about your filing status, deductions and exemptions.

Free Taxpayer Assistance: Consult your local library to learn about tax volunteers, or click here for free programs:
http://www.irs.gov/taxtopics/tc100.html

Employee Filing: Normally a full-time employee will be asked to fill out a W-4 form before he or she begins employment. With these forms the employee indicates how many exemptions they will take. The more exemptions, the less tax that will be automatically withheld by the employer.

  • To calculate your withholding, click here.

! The tax year for an individual runs from January 1 thru December 31st. However, you may still take deductions (e.g. making a contribution to a tax-deferred retirement account) through April 15. Consult with a tax professional or a tax website like Quicken.com if you have questions.

! The deadline to file your tax returns is April 15 of the following year.
If you are unable to meet this deadline, you may file a four-month extension. However, you will still pay interest and penalties for each month you are late in filing.

Tax Forms

If you are a full-time employee:

    Forms typically required:

    • Form 1040, 1040A or 1040EZ (the short form)
    • (Click for instructions: 1040, 1040A or 1040EZ)
    • Form 1040 Schedule D if you have (capital gains) from the sales of stocks, bonds or a capital asset in property like a home, car or boat
      (note: distributions from mutual funds or real estate investment trusts don't require Schedule D)
    • Your State Tax Form

      Documents typically required:

    • Your W-2 form from your employer, containing gross wages and tips
    • Any 1099 forms from banks or brokerages showing interest earned on your accounts
    • records of transactions from the sale of stocks or other capital assets

Contractor Filing: If you are a contract worker, each of your clients should send you a 1099 form including your income earned from that job from the preceding year. No income will be withheld; however, it will be your responsibility to make quarterly estimated tax payments to both the IRS and your state of residence. You should receive 1099 forms from each of your clients by February of the following year.

Other Useful Tax Links:

Documents you will need to in order to file:
http://www.quicken.com/cms/viewers/article/taxes/6028

Various Tax Forms:
http://www.quicken.com/cms/viewers/article/taxes/7949

Individual Tax Identification Number
(for those who cannot obtain a social security #):
http://www.irs.gov/individuals/article/0,,id=96287,00.html
Form W-7 (download in Adobe Acrobat format)

Stock trading and non-resident aliens tax status:
http://www.irs.gov/businesses/small/international/article/0,,id=96409,00.html

Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons Click here for form
Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding Click here for form (download instructions here)

Can I claim the foreign exclusion or deduction? Take the following quiz to find out:
http://www.irs.gov/individuals/page/0,,id%3D13627,00.html

Your Tax in a Dual-Status (resident and non-resident) Year:
http://www.irs.gov/businesses/small/international/article/0,,id=96433,00.html

W-8 form - certificate of foreign status - can exempt you from U.S. taxes for certain types of U.S. income. See Pub. 515 for more info.

How to request a taxpayer advocate: if you have had difficulty resolving a problem with the IRS, you may elect to enlist the aid of a taxpayer advocate to help you:
Fill Out and Fax Form 911

 

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