A Helpful Guide For Immigrants During Tax Season

Understanding tax obligations for immigrants

First things first, let's talk about your tax obligations. Depending on where you live, the rules might vary.

Tax Obligations For Immigrants in The UK

In the UK, as an immigrant, your obligations depend on if you are a resident or non-resident.
If you're considered a resident, you'll need to pay tax on all your worldwide income. This includes your salary, pension, and even rental income. So, whether you earn in the UK or elsewhere, you still have to pay UK tax. You will also need to file a self-assessment tax return if you're self-employed or have other UK income.

On the other hand, if you are a non-resident, you only pay tax on income earned within the UK. So, if you're earning money from a job or any other source within the UK borders, that's what you'll pay tax on.

Tax Obligations For Immigrants in The USA

Like in the UK, your tax obligations in the US depend on your residency status.
If you have a Green Card (resident status), you'll pay taxes on all your income earned at home and abroad.

For non-residents, you will only pay tax on the money made within the US. This could be salary from a US job, rental income from a US property, or other income sources.
Keep in mind that the filing requirements differ for non-residents., so research them carefully.

If you don't have a Social Security number, you won't have to worry. You can still file taxes by getting an Individual Taxpayer Identification Number (ITIN) from the IRS. This number is specifically for people who aren't eligible for a Social Security number but need to fulfil their tax obligations.

Tax Obligations For Immigrants in Canada

In Canada, your tax obligations also depend on whether you are a resident or not.

You're seen as a resident if you have a home, a spouse or a partner in Canada and if you've spent a reasonable amount of time there (typically 183 days or more in a year). Residents are required to pay taxes on all income earned, no matter where it was made.

On the other hand, if you're a non-resident, you only need to pay taxes on income earned within Canada, like the salary from a Canadian job.

Canada has some benefits and credits available to newcomers in their first year, even if they haven't filed a tax return yet.

When Are Taxes Due?

When Are Taxes Due in The UK?

If you're filing a self-assessment, you'll need to submit your tax return and pay any owed taxes by January 31st, after the end of the tax year. For instance, your deadline for the tax year ending April 5, 2024, is January 31, 2025.

Additionally, If you've made advance payments, called 'payments on account,' there's another deadline on July 31st.

However, there's no need to file a self-assessment tax return for most employees under PAYE (Pay As You Earn), whose income tax is deducted directly from their paychecks throughout the year. They don't have separate filing or payment deadlines.

When Are Taxes Due in The US

In the US, there are two main tax deadlines to know. Tax Day is when you file your federal income tax return. This year, in 2024, it's April 15th, but if you're in Maine or Massachusetts, you get until April 17th because of state holidays.

If you need more time, you can ask for a six-month extension by filling out Form 4868 before April 15th. This will push the deadline to October 15th. Keep in mind that states have their own deadlines for state taxes.

When Are Taxes Due in Canada

Tax deadlines in Canada vary depending on your filing status.

For most individual taxpayers who aren't self-employed, the deadline for filing and paying taxes for the 2023 tax year is April 30, 2024.

However, if you or your spouse/partner are self-employed, you have more time to file your taxes. The deadline for self-employed individuals and their spouses is June 15, 2024. But remember, any balance owing is still due by April 30, 2024.

Tax return process for new immigrants

Tax Return Process For New Immigrants in The UK

For Residents:

• You will need to pay tax on all your income
• You need to file a Self Assessment tax return if you're self-employed, have untaxed income, or claim UK tax reliefs.
• If your employer deducts income tax (PAYE), you might only need to file if you have other self-made income.

For Non-Residents:

• You only pay taxes on income earned within the UK.
• You might not need to file a self-assessment tax return because any tax due on your UK income is often deducted from the source.
• Consider the Non-Resident Landlord Scheme if you earn rental income in the UK. This lets your tenant take out tax from your rent payments and send it directly to His Majesty's Revenue & Customs (HMRC).
• Sometimes, non-residents still need to file a tax return. This happens if you're due tax refunds, claim UK tax reliefs, or have complicated tax situations.

Tax Return Process For New Immigrants in The US

For Residents:

• You'll need to pay taxes on your income here and abroad.
• To file taxes, You'll need a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN) from the IRS.
• The documents needed are your W-2 forms from your job, any 1099 forms for other income, and receipts for any deductions you qualify for.
• You have a few options for filing your taxes: you can do it for free online through the IRS, use user-friendly tax software, or get help from a tax professional, especially if your situation is complicated.

For Non-Residents:

• You'll only owe taxes on income within the country.
• Figuring out your tax situation can be trickier. It depends on what kind of money you made, any tax treaties between the US and your home country, and how much you earned.
• Sometimes, you might not have to file a tax return, but it could still be a good idea. Filing might get you some tax refunds or benefits you're entitled to, so it's worth looking into.

Tax Return Process For New Immigrants in Canada

For Residents:

• Even if you didn't earn any money in your first year as a resident, doing your taxes is a good idea. This helps build your tax record and could qualify you for benefits and credits.
• You'll need some important documents like your Social Insurance Number (SIN) (if you have one), tax slips (like T4 or T5), and any receipts for deductions you might have.
• You can file your return by filling out paper forms from the Canada Revenue Agency website, using user-friendly tax software, or getting help from a tax professional.

For Non-Residents:

• If you made money in Canada from a job, you should file a tax return. But even if you didn't earn anything, it's still worth filing for refunds or benefits later.
• Just like residents, you'll need your SIN (if you have it), tax slips, and any deduction receipts.
• You can file your return by filling out paper forms from the Canada Revenue Agency website, using user-friendly tax software, or getting help from a tax professional.

Can tax be refunded for immigrants?

The good news is if you're in the UK, US, or Canada, you might be eligible for tax returns.

For immigrants in the UK, you can get a tax refund if you paid too much tax, like when your employer takes out too much tax (PAYE), if you qualify for tax reliefs, or if you’ve paid tax on income earned overseas.

Just like in the UK, immigrants in the US can get tax refunds if they paid too much in taxes or qualify for tax credits like the Earned Income Tax Credit (EITC).

And for those in Canada, you could be due for a refund if you've paid more tax than you owe. Plus, if you were paying taxes as a non-resident and then became a resident, you could get some cash back based on tax agreements between Canada and your home country.

How much do immigrants pay in taxes?

It varies depending on the country you live.

First, as a resident, you'll likely pay taxes on all your income worldwide. But if you're a non-resident, you'll only pay taxes on your income within that country.

Next, your income level matters. The more you earn, the more taxes you'll owe because tax rates go up with higher incomes.

Here's the good part: deductions and credits can greatly help lower your tax bill. Claiming tax reliefs, having income from different sources, or being self-employed can also change how much you owe.

How to get through tax season as an immigrant

Tax season can be challenging for immigrants, but it can also be simple with the correct information and guidance. Understanding your tax duties is important. Take the time to learn what you need to do.

There are options available to you, so don't hesitate to explore them. And if you're ever unsure, it's okay to ask for help. You could reach out to a tax professional who’s worked with immigrants. They can guide you through the process and make sure you get all the tax breaks.

By staying informed and getting support when you need it, you'll be able to handle tax season like a pro. So, take a deep breath; you've got this!