By Alicia Atteberry

As United States Supreme Court Justice Oliver Wendell Holmes famously said, “I like to pay taxes. With them, I buy civilization.” Immigrants, including the undocumented, are a vital part of our civilization. Despite some ugly rhetoric and widespread misconceptions, undocumented immigrants in the United States pay billions of dollars in federal, state, and local taxes every year, helping to pay for services they are largely unable to access. When you combine sales tax, property tax, and income tax, they contribute a great deal to our state and federal governments and the economy as a whole.

I am an undocumented immigrant – what do I need to know about fling my taxes?

It’s tax season, and the deadline for filing is fast approaching – in 2024, taxes are due on April 15. Taxes help build and maintain roads, educate children, and keep our local, state, and federal governments functioning. Still, all of that can be hard to appreciate when the time comes to figure out complicated paperwork, or to take money out of a tight budget to pay an accountant or a service to help you. Filing taxes can be stressful for everyone, but if you’re an undocumented immigrant, it can be especially intimidating. Without legal status, it’s understandable if sending a form to the government letting officials know where you live and work might seem like a bad idea. Let’s look at all the reasons that is not true.

Won’t I Get in Trouble with the Government?

• In fact, you are more likely to get in trouble for NOT filing your taxes. Tax evasion is a crime!
• You will not be reported, let alone deported, just for filing and paying your taxes. The Internal Revenue Service is a separate government entity from USCIS or Homeland Security. Its priority is to collect taxes, and it is in the best interest of the IRS to value taxpayer privacy and keep bringing in the millions of dollars from undocumented immigrants’ income taxes.
• Under the Internal Revenue Code, the collection of laws that govern the federal tax system, even an undocumented individual who lives primarily in the United States will be treated for tax purposes as a U.S. resident. They are included in the term “resident aliens” in IRS guidance.
• The Internal Revenue Code specifically says that the IRS can only provide taxpayer information internally or to the U.S. Treasury to aid in the investigation of tax-related crimes, unless the agency is given a federal court order. The IRS is strict about following this guideline. No investigation related to immigration would be triggered by a tax filing.

Why Should I File?

• All wage earners in the United States, even undocumented immigrants, are required to file taxes if they meet wage thresholds. The specifics of what your threshold is can be complicated and are regularly updated, but essentially depend on who employs you and if you are married or not. Currently, regular employment, typically issuing a W2, requires taxes be filed if you earn above $13,850 and are single or $27,700 if you are filing with a spouse. For self-employment income, the threshold is only $400. You may receive a 1099 form for this type of income if you work as a contractor, for example, with a company like Uber or DoorDash, but even if you are paid fully in cash “under the table,” this rule applies to you.
• If you are receiving paychecks with taxes automatically deducted and then never file your taxes, that means that even if you are owed a refund, the money stays with the IRS. That’s your money, and you can only get it by filing your taxes.
• In many cases, your application for legal status will benefit from demonstrating that you have been paying taxes. It is a legal requirement of the IRS that all wage earners in the United States, regardless of immigration status, pay taxes. Doing so helps demonstrate that you have “good moral character,” a requirement when applying to adjust your status. If you are already paying taxes, that does a lot to demonstrate that you will be a law-abiding citizen.

Where Do I Start?

• The first step to filing taxes if you aren’t eligible for a social security number is applying for an ITIN, an Individual Taxpayer Identification Number. This is the number the IRS uses to track tax payments in place of a social security number. It is largely used by undocumented immigrants, and it does not provide any immigration status or benefits. It is only used for taxes.
• To apply for an ITIN, you will need to fill out Form W-7 and provide proof of both identity and foreign status. These can both be covered by an active passport from your native country, otherwise multiple documents will be needed, such as an ID card from a U.S. state and a birth certificate from a foreign country. Then, you will prepare you taxes and submit the W-7 with them.
• If you haven’t been filing your taxes, the IRS allows you to file back taxes for previous years and/or amend taxes that were filed incorrectly.

More Things to Consider

• The IRS itself provides many resources to aid in filing your taxes without paying for preparation. They also recently began providing forms and official guidance in foreign languages, including the basic filing form, Form 1040, in Spanish!
• It’s a good idea to seek professional help when filing your taxes, especially if it is your first time dealing with the process. There are many popular online services available, or a quick internet search could help you find a local accountant.
• There are also many services and organizations across the United States that provide free tax services to low-income taxpayers and/or taxpayers with limited English. One example is the nonprofit BakerRipley Neighborhood Tax Centers in Houston, Texas, where volunteers help hundreds of thousands of people a year file their taxes for free.
• Without a Social Security Number, many tax breaks and benefits are not available to undocumented immigrants. However, some are, including the American Opportunity Tax Credit, the Child Tax Credit (if your child has a social security number), and the Lifetime Learning Credit. These credits help you afford the expenses of childcare and education.
• If you are self-employed or work as a contractor, figuring out your taxes ahead of time and making estimated tax payments is a good idea. Otherwise, you will have a big tax bill at the end of the year and possibly have to make penalty payments.
• If you want to file taxes this year and haven’t begun the process, it’s not too late! You can file a tax extension with the IRS, and even file before requesting an ITIN.

At Eagan, we review the recent tax history of every client and give guidance on how to rectify any issues with their filings. Unfortunately, if taxes have not been filed or have been filed incorrectly, this can sometimes slow down the process of filing for immigration benefits.

If you are planning to apply for status soon – no matter how you will apply, it is a good idea to get your taxes in order to the best of your ability.

Reach out to an immigration specialist at Eagan Immigration today at 202-709-6439 for a free, confidential phone evaluation.