Having a Green Card allows you to have multiple benefits, like being a lawful permanent resident of the United States and paying taxes. A CPA in North Dallas, TX, can help you know about the tax process for Green Card holders, such as how to file your taxes, the paperwork you will need to complete, the income that has to be stated, and whether you will be eligible for the tax credits and deductions that are available to citizens of the United States. 

How Difficult is it to file taxes in the US?

The procedures for filing your income, property, and gift tax returns, as well as for paying estimated tax, are essentially the same if you are a resident alien (owner of a green card). Additionally, you pay taxes as a resident alien in most cases in the same ways as a citizen of the United States. It is important to remember that no matter where you live, U.S. income tax is applied to your worldwide income. This means that you must record all income, whether it be through sources inside or outside the US, including your native country.

Fortunately, resident aliens are usually eligible for the same filing statuses, exemptions, credits, and deductions as citizens of the United States.

US Expat Tax can help expatriates from every corner of the world who have to file a US tax return for income and fulfill all of their state and federal income tax filing criteria. Even US citizens consider tax laws to be confusing and challenging to comply with, so please get in touch with US Expat Tax for help with tax planning and preparation.

Substantial presence test

“Substantial presence” is characterized by the Internal Revenue Service (IRS) to include a physical presence in the United States for a minimum of 31 days out of the year as well as at least 183 days over the previous three years, counting the current year.

There is some uncertainty in the 183-day calculation for the previous three years. In this year, a day is equivalent to every day. However, days from the year before only make up one-third of a day. Days prior to that year are only worth one-sixth of a day. 

Certain professionals, government employees, and students are spared from these rules. They are not valid if you travel into the United States while residing in Mexico or Canada or if a medical condition that started and was diagnosed here prohibits you from leaving the country.

How Can a Green Card Holder File Their Taxes?

Filing taxes as a Green Card holder is done through mail or electronically, just like it is for U.S. citizens. Here’s a detailed how-to:

Determine your filing status

Your filing status might be single, married, the head of your home, or the surviving eligible spouse.

Collect your tax records

Collect all required income-related paperwork, such as financial and transaction records, W-2s, and 1099s. Remember to attach proof of your international income as well.

Select the proper tax form

In addition to submitting Form 1040, you may also need to file other forms or schedules, like Form 1116 and Form 2555, if you earn income from sources outside of the United States, according to your specific situation.

What should you do if your spouse is not a green card holder?

Married Filing Jointly

You can submit a joint return and consider your partner as a resident alien for tax reasons by using the Married Filing Jointly status. In this case, you will both opt to file jointly and reveal your combined worldwide income. Keep in mind that your spouse’s worldwide income will now be subject to US taxes as well.

Married Filing Separately

If you fit into this category, you are allowed to file your taxes separately from your spouse. Be aware that your spouse might be required to submit a separate form as a non-resident alien if they obtain income from sources within the United States.

Head of Household

If you are the main breadwinner and your non-resident immigrant spouse does not get any income from sources within the United States, you can apply for this status.