At the start of the 2025 tax season on January 27th, many new immigrants have begun preparing their taxes. However, due to unfamiliarity with the rules, they often overlook certain materials, leading to complications. In light of this, seasoned tax professionals are advising new immigrants on some key details to keep in mind.
Taxes are crucial for every American citizen and resident’s benefits and subsidies, making annual tax filing an essential obligation. While immigrants with good English skills and familiarity with tax policies can often handle their taxes themselves, those with limited English proficiency or complex tax situations typically require the assistance of tax professionals. Professional tax advisors can usually help taxpayers organize their information and complete the filing process in as little as half an hour or less.
In the city of Rosemead, which is home to a large Chinese population in Los Angeles County, Mr. Vincent Du, a tax professional at “Trust Tax Services,” has accumulated years of tax filing experience. He has been receiving a significant volume of tax information daily and has observed that some clients, being new to the United States, indeed face issues with incomplete tax documentation. He highlights the following points for attention:
Employees who receive W-2 wage forms or self-employed individuals with 1099 forms should bring their driver’s license, Social Security card, and, if applicable, tax forms 1095A, 1095B, or 1095C for medical insurance when seeking assistance from a tax professional.
For individuals with mortgages, loan documents need to be provided. Additionally, documents such as stock interest statements, bank account numbers, and property transaction records should also be brought in. Providing bank account information facilitates IRS deductions or refunds, with refunds being directly deposited into the account or issued via a mailed check – the latter may lead to potential misplacement or delays, prompting inconvenient follow-ups with the IRS.
When selling a vehicle or property, while vehicle sales generally do not require transaction receipts due to typically being sold at a decreased value, property sales necessitate transaction documents. Home sellers must provide the final settlement statement for the property under trust.
Mr. Du mentions that if individuals have multiple sources of income, those exceeding $600 are typically reported on a 1099 form by the employer. For incomes below $600, employers may not issue a 1099 form, but this should not cause concern as the situation can be discussed with a tax professional to determine the appropriate course of action.
Interest income from regular bank deposits such as Certificates of Deposit (CD) is also subject to taxation. Banks typically issue a tax reporting form (1099-INT) for such interest income, which should be provided to the tax advisor.
For families with college-bound children, parents may receive a 1098-T form listing the student’s annual educational expenses. Eligible households can utilize the information on this form to claim deductions or refunds.
In the tax year of divorce, taxpayers should provide divorce documents to facilitate modifications to tax forms.
For households welcoming a new addition, bringing the child’s birth certificate is advisable. Childbirth impacts tax credits such as the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and childcare deductions, potentially lowering the household’s taxable income. Families meeting income criteria and having children under 17 can apply for up to $2,000 in Child Tax Credit claims.
Similarly, if there has been a death in the family, relevant documentation should be provided to help the tax professional calculate the associated changes.
Mr. Du also cautions new immigrants against missing the April 15th tax filing deadline. Extensions to October 15th may be requested if unable to file before the due date. Failure to apply for an extension promptly may result in penalties.
For taxpayers unable to pay their taxes in full, tax professionals can assist in applying for installment payment plans to alleviate excessive financial strain. In cases of refunds, the IRS generally issues refunds within 21 days of tax form submission.
Finally, Mr. Du emphasizes that while President Trump’s potential tax reforms for his second term await congressional approval and implementation, this year’s taxpayers can expect minimal changes in tax policies other than slight increases in the tax base. Individuals with inquiries are encouraged to contact Mr. Du for detailed consultation.