US Tax FAQs

Generally yes if your income exceeds the standard deduction for your filing status — $16,100 for a single filer in 2026, $32,200 filing jointly. But there are important exceptions: self-employment earnings of $400 or more require a return regardless of the total, and non-residents with US-source income normally must file Form 1040-NR whatever they earned. It is also often worth filing when you are under the threshold, because withheld tax is only refunded if you claim it.

It has nothing to do with immigration status. For tax purposes you are a resident if you hold a green card or meet the substantial presence test — broadly 31 days in the current year and 183 days across a three-year weighted count. Residents are taxed on worldwide income; non-residents only on US-source income, and they file Form 1040-NR instead of 1040. Getting this determination wrong is the single most common and most expensive error on immigrant returns.

Yes, and you generally must if you are a citizen or green card holder, because the US taxes worldwide income regardless of where you live. Citizens and residents abroad get an automatic two-month extension to June 15. Relief such as the foreign earned income exclusion and the foreign tax credit usually prevents double taxation, but they have to be claimed on a filed return — they are not automatic.

The IRS issues most refunds within 21 days of accepting an e-filed return with direct deposit. Paper returns take considerably longer, often six weeks or more. Returns claiming certain credits are held until mid-February by law, and anything requiring manual review — including many ITIN applications and amended returns — takes longer.

It is fixable and it is better to start voluntarily than to wait for a notice. The IRS generally expects the last six years of returns to bring you current, and penalties are calculated on tax owed, so years where you were due a refund typically carry no penalty. Refunds are only claimable for three years back. First-time penalty abatement is available if you have an otherwise clean compliance record.

Consumer software handles a straightforward W-2 return well. It handles residency determinations, dual-status years, treaty claims, FBAR and FATCA reporting, and first-year S-Corp elections poorly, and it will not tell you when it has got them wrong. If you are on a visa, changed status mid-year, hold foreign accounts, or run a business, a review costs far less than an amended return and an IRS notice.

Seven rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%. For a single filer the 10% band covers the first $12,400 of taxable income and 37% begins above $640,600; filing jointly the 10% band runs to $24,800 and 37% starts above $768,700. They are marginal, so reaching a bracket does not tax all of your income at that rate.

Federal individual filing starts at $19.99, state filing at $29.99, non-resident 1040-NR returns at $49.99 and ITIN assistance at $79.99. Business filings and complex returns are quoted on scope. Pricing is published up front with no hidden fees.

For a normal calendar-year return, 15 April of the following year. If that date falls on a weekend or a holiday in the District of Columbia it moves to the next business day. You can request an automatic six-month extension to 15 October using Form 4868, but that extends the time to file, not the time to pay — tax owed is still due in April, and interest runs from then.

In most states, yes. A handful have no personal income tax, and a few tax only certain income. If you lived or worked in more than one state during the year you may owe part-year returns in each, and a credit in your resident state for tax paid elsewhere. We work out which returns are required so you do not discover a missing one later.

Take whichever is larger. Itemising only helps when your deductible costs — mortgage interest, state and local taxes within the cap, charitable giving, large medical expenses — exceed the standard deduction for your filing status. Since the standard deduction was raised, most filers come out ahead with it, but homeowners in high-tax states frequently do not. We compute both.

The IRS generally issues refunds on e-filed returns with direct deposit within about three weeks. Returns claiming the earned income credit or the additional child tax credit are held longer by law. Paper filing, or any mismatch the IRS wants to review, extends it considerably.

Yes, through an amended return on Form 1040-X. Amendments are generally worth filing where you missed a deduction or credit, reported income incorrectly, or used the wrong filing status. You normally have three years from the original filing date to claim a refund on an amendment.

Anyone with a US tax filing or reporting obligation who is not eligible for a Social Security number. In practice that is most often a non-resident spouse or dependent being included on a US return, a non-resident with US-source income to report, or someone claiming a tax treaty benefit. If you are eligible for an SSN you should get that instead — you cannot hold both.

Commonly around seven weeks once a complete application reaches the IRS, and longer during filing season or if anything needs clarifying. Because the application normally travels with your tax return, an incomplete W-7 delays the return and any refund with it, which is the main reason to get the documentation right first time.

No, and we would not suggest it. You can use a Certifying Acceptance Agent who verifies your documents and returns them to you, or take them to a designated IRS Taxpayer Assistance Center by appointment. Either route avoids your passport being out of your possession for weeks. Plain photocopies, notarised or otherwise, are not accepted.

Yes. An ITIN that is not used on a federal return for three consecutive years expires at the end of the third year, and certain older ITINs were retired on a schedule. Filing with an expired number causes processing delays and can suspend credits. If it has been some years since the number was last used on a return, assume it needs renewing.

No. It is purely a tax processing number. It does not authorise you to work in the US, does not provide immigration status, and does not make you eligible for Social Security benefits. It exists so that people with a US tax obligation can meet it.

It is a proposed change to your return, issued when income reported to the IRS by a third party does not match what your return shows. It is a proposal, not a bill, and you can agree or dispute it. It is also frequently overstated, particularly on securities sales, where the IRS may see gross proceeds reported on a 1099-B without the cost basis that reduces the actual gain.

It depends on the notice and the date is printed on it — commonly 30 days for a CP2000, and 90 days for a statutory notice of deficiency, which is a hard jurisdictional deadline. Missing the window does not just remove your chance to argue; for a proposed assessment it generally becomes final, after which correcting it is considerably harder. Treat the date on the letter as the governing fact.

Not before checking it. Automated notices are often wrong in the taxpayer's favour once basis, adjustments or income reported under a spouse's or business's identifier are accounted for. Paying an incorrect proposal also concedes the position for that year. Verify first, then pay what is genuinely owed.

Often, yes. First-time penalty abatement is available to taxpayers with a clean recent compliance history and is granted more readily than most people expect. Beyond that, reasonable-cause relief can remove penalties where circumstances such as serious illness, disaster or reliance on incorrect professional advice explain the failure. Interest is a different matter and is rarely abated.

There are formal routes, and using one is far better than non-payment. Instalment agreements spread the balance over time and are straightforward to obtain for moderate amounts. Where the debt genuinely exceeds your ability to pay, an offer in compromise can settle for less, though the qualifying criteria are strict and the process is document-heavy. Currently-not-collectible status can pause collection during hardship. Doing nothing leads to liens and levies, which is the outcome worth avoiding.

To claim a refund, generally three years from the date you filed the original return or two years from the date you paid the tax, whichever is later. After that the refund is gone regardless of how clearly you were entitled to it. There is no equivalent deadline stopping you from correcting an underpayment, and voluntarily correcting one is generally treated more favourably than being found.

Yes, and you should. The two returns tax you on a fundamentally different basis, so filing the wrong one is not a technical slip — a non-resident who filed a 1040 has likely claimed the standard deduction and possibly credits that are restricted to residents. Correcting it reduces your exposure, and where the error went the other way, it can recover a refund. This is one of the most common amendments among visa holders and international students.

Filing an amendment is not itself a red flag, and amendments are routine. What matters is what the amendment says and how well it is supported — a well-documented change with a clear explanation is processed normally. Leaving a known error in place is the riskier position, because the IRS receives the same third-party information you did and discrepancies surface on their own schedule rather than yours.

Considerably longer than an original return. Amendments are handled largely by hand and the IRS has published processing times measured in months rather than weeks, with recent years running longer than the stated target. The IRS provides an online tool for tracking the status of an amended return. Plan on it being slow and do not count on the refund arriving in a particular month.

No. The IRS corrects arithmetic errors itself and will notify you of the adjustment. Amend when something substantive changes — income you did not report, a deduction or credit you missed or wrongly claimed, the wrong filing status, the wrong return form, or a change in your residency determination. If the correction does not change your tax, it is generally not worth filing.

Yes, and most of the amendments we file were originally prepared elsewhere or self-filed through software. We work from the return as lodged plus your source documents. You do not need anything from the original preparer, and you are not obliged to go back to them.

It is decided by tax rules, not your visa. You are generally a resident if you hold a green card, or if you meet the substantial presence test — broadly 31 days in the current year and 183 days counting all of the current year, a third of the prior year and a sixth of the year before that. Certain visa holders are exempt individuals whose days do not count, notably F, J, M and Q students and scholars for a limited number of years. We run the calculation on your actual dates.

If you received wages subject to US withholding, 15 April, in line with the normal deadline. If you had no such wages, the due date is 15 June. An extension on Form 4868 is available in either case, and as with any US return it extends filing rather than payment.

Considerably fewer than residents. Non-residents generally cannot take the standard deduction, with a treaty-based exception for students and business apprentices from India, and cannot normally file jointly with a spouse. Itemised deductions are limited mainly to state and local income taxes, certain charitable contributions and casualty losses. This narrowness is precisely why residency status is worth establishing carefully.

A treaty between the US and your home country can exempt or reduce US tax on particular categories of income — scholarships, teaching and research income, pensions, dividends and interest are the common ones. Whether you qualify depends on the specific treaty article, your status and sometimes a time limit. Claiming a benefit requires disclosure on the return, and claiming one you do not qualify for is worse than not claiming it.

It should be corrected, because the two returns tax you on a different basis and grant different deductions. Filing the wrong one can mean you wrongly claimed the standard deduction or credits restricted to residents. We assess the year in question and file an amendment to put it right, which is far better than waiting for the IRS to raise it.

It is the return you file for a year in which you were a non-resident alien for part of the year and a resident alien for the rest. Rather than choosing one status, you apply each set of rules to its own period: only US-source income is taxed for the non-resident portion, while worldwide income is taxed for the resident portion. It is filed as a single return with the other form attached as a supporting statement and labelled as a dual-status return.

Most commonly people in their first year of US residency — someone who arrives partway through the year on a work visa and meets the substantial presence test, or a student whose exempt-individual years run out mid-year. It also applies in the year you give up residency and leave. If your status genuinely did not change during the year, you are not dual-status, and it is worth confirming which is the case before filing.

No. This is the main disadvantage and it surprises people, because it can mean a dual-status return produces more tax than a full-year resident return on the same income. You must itemise instead, you cannot file jointly with a spouse, and you cannot use head of household. Several credits are also restricted. Where an election to be treated as a full-year resident is available, this is precisely why it is worth modelling.

It depends on the numbers, and it genuinely goes both ways. Electing full-year resident treatment restores the standard deduction and joint filing, which usually reduces tax — but it also brings your entire year of worldwide income into the US net, including income earned abroad before you arrived. If that pre-arrival income was substantial, dual-status may well win. The only reliable answer is to compute both, which is what we do.

A provision that lets you elect to be treated as a resident for part of the year before you would otherwise qualify, provided you meet presence conditions in the current and following year. It is useful mainly because it can open the door to other elections and to joint filing. It has specific timing requirements and sometimes means requesting an extension so that the following year's presence test can be satisfied before the election is made.

Often not, because of the attached statement, so these returns are frequently paper-filed. That makes accuracy on the first attempt more valuable than usual — a paper return that has to be amended adds months. It also means allowing more time before the deadline than an e-filed return needs.

If you had US income, yes. If you had no income at all, you still generally need to file Form 8843 to document your exempt-individual status for the year. Many students skip Form 8843 believing that no income means no filing obligation, which leaves a gap in the record of their residency history.

Generally not, while you remain a non-resident alien for tax purposes. Employers often withhold it anyway because their payroll system treats you as it would any other employee. The tax can be recovered, first by asking the employer to correct it and refund you, and failing that by claiming it from the IRS directly with supporting documentation.

Form 1040-NR for as long as you are an exempt individual, which for F visa holders covers a limited number of calendar years of presence. After that the substantial presence test applies normally and you may become a resident filer. Popular consumer tax software generally prepares resident returns and will happily produce a 1040 for someone who should have filed a 1040-NR.

Yes. This is a genuine and unusual benefit: the US-India tax treaty allows students and business apprentices from India to claim the standard deduction on a non-resident return, which non-residents otherwise cannot do. It is frequently missed, and on a typical student income it is worth a substantial part of the refund.

It can be corrected by amending those years. Whether it is worth doing depends on the direction of the error — if you filed as a resident and claimed deductions or credits you were not entitled to, correcting it reduces your exposure; if you overpaid, an amendment can recover it, generally within three years of the original filing. We review the years in question and tell you which are worth amending.

Usually yes, once you meet the substantial presence test — broadly 183 days on the weighted three-year calculation. Unlike F and J visa holders, H1B and L1 holders are not exempt individuals, so your days count from the start. In your first year you may be resident for only part of the year, which is what makes that return more complex than the ones that follow.

As a US tax resident, yes — the US taxes residents on worldwide income. That includes salary earned abroad, bank and deposit interest, rental income, dividends and capital gains, whether or not the money is brought into the US. Reporting it does not necessarily mean paying US tax on it twice; the foreign tax credit and treaty provisions usually relieve most or all of the double taxation, but the reporting itself is not optional.

It is an election that lets you be treated as a resident from a chosen date in your arrival year rather than filing dual-status. It can be advantageous because residents get the standard deduction and can file jointly, but it also pulls more worldwide income into the US net. Which is better depends on how much foreign income you had before arriving and whether you have a spouse to file with. It is worth computing rather than defaulting.

If the combined highest balance of your foreign financial accounts exceeded $10,000 at any point in the year, you must file an FBAR with FinCEN. A separate obligation, Form 8938 under FATCA, applies at higher thresholds and is filed with your tax return. Penalties for not filing an FBAR are severe and are assessed per account per year, which is why we treat this as a required check rather than an add-on.

Yes, by applying for an ITIN for them on Form W-7, usually submitted together with the tax return. Filing jointly gives you a larger standard deduction and generally better brackets, so for a single-earner household it is normally worth doing. If your spouse is a non-resident, electing to treat them as a resident for tax purposes brings their worldwide income into scope as well, which we weigh before recommending it.

Almost always because the employer's payroll system defaulted to treating you as any other employee, not because you owed it. The exemption for non-resident students on F, J, M and Q visas is not something payroll software applies automatically, and it depends on facts about your status that your employer may never have been told. It is a processing error, not a judgement about your liability.

No, and this is the point most people miss. Your income tax return recovers over-withheld federal income tax. Social Security and Medicare are separate taxes and have their own claim process — either the employer corrects their filings and refunds you, or you claim from the IRS on Form 843 supported by Form 8316. Filing your 1040-NR does nothing for the FICA, which is why the money so often sits unclaimed.

The general refund claim period is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. In practice that usually means more than one year of study or OPT is still open, so it is worth reviewing every year in which FICA appeared on your payslips rather than only the most recent one. Years outside the window are lost, which is the reason not to leave it.

Your W-2 for each year claimed, your I-20 or DS-2019, your I-94 arrival and departure record, your visa and passport pages, and evidence that you asked your employer to refund the tax and what they said. Where the employer did not respond, that itself needs documenting. The completeness of this pack is the main thing that determines whether the claim is paid or comes back with questions.

That is the expected path, not a dead end — the IRS process exists precisely for it. Form 8316 is where you state that you requested a refund from the employer and did not receive one. Employers sometimes decline because correcting prior-year payroll filings is work for them, and sometimes they no longer exist. Either way the claim goes directly to the IRS instead.

No. It is a claim for tax that was not legally owed, made through the process the IRS provides for it. Tax compliance is generally regarded favourably in immigration matters, and correctly recovering tax you did not owe is compliance. What can cause difficulty is having filed returns on the wrong basis, which is a separate issue and one worth fixing if it applies to you.

They are different kinds of thing. An LLC is a legal entity formed under state law that gives you liability protection. S-Corp is a federal tax classification you elect with the IRS, and an LLC or a corporation can elect it. So the real choice is not LLC versus S-Corp but how your LLC is taxed: by default, or as an S-Corp.

A single-member LLC by default passes its whole profit to your personal return, and all of it is subject to self-employment tax at 15.3% up to the Social Security wage base and 2.9% for Medicare above it. Under an S-election you take a reasonable salary, which bears employment tax, and the remaining profit as a distribution, which does not. The saving is the employment tax on the distribution portion.

There is no universal figure, because it depends on a defensible salary for your role and what the extra compliance costs you. An S-Corp adds payroll processing, a separate 1120-S return and often state-level fees. Below roughly the mid five figures of profit those costs commonly outweigh the employment tax saved; well above it the election usually pays for itself several times over. It is worth modelling rather than following a rule of thumb.

It is what you would have to pay someone else to do your job, judged on duties, experience, time spent and comparable pay. It matters because the incentive is to set the salary low and take more as distribution, and the IRS knows that. An unreasonably low salary can be reclassified, with back employment tax, interest and penalties, which erases the saving. Setting it defensibly is the whole exercise.

For an election effective from the start of a tax year, generally no later than two months and fifteen days after the beginning of that year, or at any time during the preceding year. Miss it and the election normally takes effect the following year instead — though the IRS provides late-election relief where there was reasonable cause, which we can pursue if you have missed the window.

It is your Social Security and Medicare contribution as a self-employed person, and it runs at 15.3% of net profit — 12.4% Social Security up to the annual wage base and 2.9% Medicare with no ceiling, plus an additional Medicare surcharge at higher incomes. An employee splits this with their employer; self-employed people pay both halves, but can deduct half of it against income tax.

Generally 15 April, 15 June, 15 September and 15 January of the following year, with the date moving when it falls on a weekend or holiday. You are normally expected to pay if you will owe $1,000 or more for the year. Paying either 90% of the current year liability or 100% of the prior year — 110% at higher incomes — puts you inside the safe harbour and avoids the penalty.

Yes, if part of your home is used regularly and exclusively as your principal place of business. Exclusively is the demanding word — a dining table used for work in the evenings does not qualify. You can use the simplified per-square-foot method or the actual-expense method apportioning rent, utilities, insurance and repairs. We compute both and take the larger.

You still report the income. The 1099 is the payer's reporting obligation, not the trigger for yours — all business income is reportable whether or not a form was issued. The bigger risk runs the other way: a 1099 issued for more than you actually received, or issued twice, will be matched against your return by the IRS, so it is worth reconciling rather than assuming the forms are right.

An LLC gives you liability protection but does not by itself change your tax — a single-member LLC is taxed the same as a sole proprietor. The tax saving comes from electing S-Corp treatment, which lets you split profit between salary and distribution and cuts employment tax on the distribution. That only pays once profit is high enough to absorb the extra payroll and filing cost, so it is a question of scale rather than a default step.

You pay the employer half of Social Security and Medicare — 6.2% and 1.45% of wages, matching what you withhold from the employee — plus federal unemployment tax under FUTA and state unemployment tax. Separately you withhold and remit the employee's income tax and their half of Social Security and Medicare, which is their money held in trust, not an expense of yours.

Either monthly or semi-weekly, determined by your reported tax in a prior lookback period. Monthly depositors pay by the 15th of the following month; semi-weekly depositors pay within days of each payday, on a schedule keyed to which day of the week you pay. A separate next-day rule applies once accumulated liability reaches $100,000. Getting your schedule right matters, because depositing late is penalised even when you pay in full.

Form 941 is the quarterly return reporting wages, withheld income tax and Social Security and Medicare tax. It is due by the end of the month following each quarter — 30 April, 31 July, 31 October and 31 January. It is a return, not a payment: the tax itself is paid through your deposit schedule during the quarter.

Where withheld employee taxes are not paid over to the government, the IRS can assess the unpaid trust fund portion personally against individuals responsible for collecting and paying it — owners, officers, sometimes bookkeepers. It pierces the liability protection of your entity, which is what makes unpaid payroll tax categorically more dangerous than most other business debts.

Only if they genuinely are. Classification turns on the degree of control you exercise over how, when and where the work is done, not on what the contract says or whether the worker prefers it. Misclassification exposes you to back employment taxes, penalties and interest for every affected worker and period, and it is an area of active enforcement. If a worker looks like an employee in substance, treating them as a contractor is a liability rather than a saving.

You need records, though not necessarily a monthly service. What you cannot do without is a clean separation between business and personal spending and evidence for what you deduct. A single mixed account is the most common reason a deduction cannot be substantiated. If you are genuinely low-volume, a year-end close may be enough.

Bookkeeping is the recording — categorising transactions and reconciling accounts so the numbers are complete and accurate. Accounting is what you do with those records: producing statements, interpreting them, planning tax and reporting. Reliable bookkeeping is the precondition, because accounting on unreliable books produces confident answers that happen to be wrong.

Yes, and it is common. We rebuild from bank and card statements and payment platform records, categorise the year, reconcile it and identify deductions that were never captured. It is priced per month of back records. Doing this before filing is almost always cheaper than filing on unreliable numbers and amending later.

We support sales tax reporting where you have an obligation, including tracking taxable sales by jurisdiction. Whether you have an obligation at all depends on economic nexus rules that differ by state and are triggered by sales volume or transaction count rather than physical presence, so a business selling online can acquire obligations in states it has never visited. We help identify where you have crossed a threshold.

The mainstream small business platforms, and we can work directly from bank feeds and statements where you do not use software at all. If you are choosing, we will suggest something proportionate to your volume rather than the most featured option, since the cost of over-specified software is usually paid in the time nobody spends maintaining it.

Any US person — citizen, green card holder or tax resident, and also entities — whose foreign financial accounts had a combined highest balance exceeding $10,000 at any point in the calendar year. It includes accounts you do not own but have signature authority over. The test is aggregate and uses the highest balance during the year, so briefly holding a larger sum, or moving money between two accounts, can trigger it.

They are separate obligations. The FBAR is FinCEN Form 114, filed electronically with the Treasury and not part of your tax return, with the $10,000 aggregate threshold. Form 8938 is a FATCA disclosure filed with your tax return, with higher thresholds that vary by filing status and whether you live abroad, and it covers a wider class of assets than just accounts. Many people must file both, reporting overlapping information.

15 April, aligned with the tax return deadline, with an automatic extension to 15 October that you do not have to request. It is filed separately from your return through the FinCEN BSA E-Filing system, which is why it is possible to file your tax return on time and still miss the FBAR entirely.

Severe, and assessed per account per year. Non-wilful failures attract a substantial penalty per violation, while wilful failures can reach the greater of a fixed statutory amount or 50% of the account balance, with criminal exposure in the worst cases. This asymmetry — a modest account generating a penalty far larger than any tax involved — is why the filing itself matters more than the amounts.

Address it deliberately rather than either ignoring it or simply back-filing. If the failure was non-wilful, the Streamlined Filing Compliance Procedures allow you to become compliant with a much reduced or, for those living abroad, waived penalty. If no tax was owed and only the reports were missed, the Delinquent FBAR Submission Procedures may resolve it without penalty. What matters is choosing the right route before contact from the IRS, because the options narrow considerably afterwards.