Tax Obligations

If you are in the United States on a nonimmigrant visa, you need to be aware of your potential tax obligations. Depending on your situation you may be required to file US taxes. We cover some general guidelines on tax obligations while in the US on a nonimmigrant visa here.

What are my US tax obligations while on a nonimmigrant visa?

  1. Income Tax: If you are working in the United States and earning income, you are generally required to file an income tax return with the Internal Revenue Service (IRS) and report your worldwide income, unless exempted by a tax treaty. This includes wages, salary, tips, and other types of taxable income. You will need to obtain a taxpayer identification number, such as a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), to file your tax return.
  2. Social Security and Medicare Taxes: If you are employed in the United States, you are generally subject to Social Security and Medicare taxes, also known as FICA taxes, which are deducted from your paycheck. Your employer is responsible for withholding these taxes and paying them to the IRS on your behalf. If you are self-employed, you may be subject to self-employment taxes, which are similar to Social Security and Medicare taxes.
  3. State and Local Taxes: In addition to federal taxes, you may also be subject to state and local taxes, depending on the state or locality where you live and work. State and local tax laws vary, so it’s important to familiarize yourself with the tax requirements in your specific location.
  4. Tax Treaties: The United States has tax treaties with many countries, which may provide exemptions or reduced tax rates on certain types of income for nonimmigrant visa holders. It’s important to review the tax treaty between the United States and your home country, if applicable, to determine if you are eligible for any tax benefits.
  5. Reporting Foreign Assets and Income: As a nonimmigrant visa holder, you may have additional reporting requirements if you have foreign assets, such as bank accounts or investments, or if you have foreign income. This may include filing FinCEN Form 114 (Report of Foreign Bank and Financial Accounts, also known as FBAR) and disclosing foreign financial assets on Form 8938 (Statement of Specified Foreign Financial Assets).

Is there a tax treaty between the United States and Canada?

Yes, there is a tax treaty between the United States and Canada. It is officially known as the “Convention Between the United States of America and Canada with Respect to Taxes on Income and on Capital” and was signed on September 26, 1980. The treaty is intended to prevent double taxation and promote economic relations between the two countries by establishing rules for the taxation of income and capital that arise from cross-border activities.

The U.S.-Canada tax treaty covers a wide range of topics, including the taxation of business profits, dividends, interest, royalties, capital gains, and other forms of income. It also provides for rules on residency, permanent establishment, and other tax-related matters for individuals and businesses operating across the U.S.-Canada border. The treaty also includes provisions for resolving disputes between the two countries, including procedures for arbitration.

Is there a tax treaty between the United States and Mexico?

Yes, there is a tax treaty between the United States and Mexico. The tax treaty is officially known as the “Convention between the United Mexican States and the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income” and was signed on September 18, 1992. It is commonly referred to as the “U.S.-Mexico Tax Treaty.”

The U.S.-Mexico Tax Treaty is designed to prevent double taxation, which occurs when the same income is taxed by both countries. It contains provisions to determine the taxation of various types of income, including business profits, dividends, interest, royalties, and capital gains. The treaty also provides mechanisms for resolving disputes between the two countries regarding the interpretation or application of the treaty.

We are not tax advisors or accountants. This article is for informational purposes only. It’s important to note that tax laws and regulations are complex and subject to change. It’s recommended to consult with a qualified tax professional or tax advisor to ensure that you are in compliance with all applicable tax laws and regulations while on a nonimmigrant visa in the United States.

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