Your First Year in the U.S.: Tax Guide for Immigrants

Filing taxes for the first time in a new country is intimidating. The rules are different, the forms are unfamiliar, and the fear of making a mistake is real. If you just arrived in the U.S., here's what you actually need to know, without the legal jargon.

Do You Have to File?

The general rule: if you earned more than $14,600 as a single filer (2025), or $29,200 married filing jointly, you're required to file a federal tax return.

But even if you earned less, you may want to file anyway. Why? Refundable tax credits. The IRS can actually send you money back even if you paid no taxes, but only if you file a return.

One fact that surprises many newcomers: undocumented workers file taxes in the United States every year using an ITIN. The IRS does not share tax information with immigration authorities. This protection is written into federal law under IRC § 6103. Filing taxes is safe, and it creates a documented record of contributions that can help in future immigration proceedings.

SSN vs. ITIN: Which One Do You Need?

A Social Security Number (SSN) is for people authorized to work in the U.S.: citizens, permanent residents, and holders of work-authorized visas.

An ITIN (Individual Taxpayer Identification Number) is a nine-digit number beginning with "9" issued to people who have U.S. tax obligations but don't qualify for an SSN. It doesn't authorize work and has no effect on your immigration status.

To apply for an ITIN, you need:

• •Completed Form W-7
• •Original passport or a certified copy
• •A tax return (or qualifying exception documentation)

Processing takes 6–8 weeks. If you're close to a deadline, a Certifying Acceptance Agent (CAA) can certify your documents on the spot, so you don't need to mail your original passport to the IRS.

The Income Documents You Need

Before you file, gather everything that reports your income for the year:

• •W-2: issued by your employer by January 31, showing wages and taxes withheld.
• •1099-NEC: for freelancers and independent contractors. If someone paid you $600 or more, they're required to send this.
• •1099-K: for payments through Venmo, PayPal, Stripe, or other platforms (applies if you received over $600 in 2024 and beyond).
• •1099-MISC: miscellaneous income (rent, prizes, royalties).

If you're self-employed, keep all expense receipts. Those are the deductions that reduce your tax bill.

Choosing Your Filing Status

Your filing status determines your tax rate and the deductions you can take. The five options:

• •Single: you're not married or are legally separated.
• •Married Filing Jointly (MFJ): you and your spouse combine income. Usually the best option when one partner earns significantly more.
• •Married Filing Separately (MFS): rarely advantageous, but it exists.
• •Head of Household (HoH): you're unmarried, you paid more than half the cost of keeping up your home, and a qualifying person lived with you. Better tax rates than single, and many people who qualify don't realize it.
• •Qualifying Surviving Spouse: available for two years after a spouse's death if you have a dependent child.

Choosing the wrong status is one of the most expensive mistakes on a first-year return.

Key Tax Credits to Know

Credits reduce your tax bill dollar for dollar, or put money in your pocket if you qualify for refundable credits.

Child Tax Credit (CTC): up to $2,000 per qualifying child under 17. The refundable portion is $1,600 per child for 2025. The child must have a valid SSN.

Earned Income Tax Credit (EITC): for low-to-moderate income workers. Up to $7,830 for families with three or more children (2025). Requires a valid SSN; ITIN holders do not qualify for this one.

Child and Dependent Care Credit: covers a portion of daycare or dependent care expenses incurred while you worked or looked for work.

American Opportunity Credit: up to $2,500 for the first four years of college. Partially refundable.

Common First-Year Mistakes

The mistakes we see most often from first-year filers:

• •Not filing at all: you may owe nothing, but you lose refundable credits the IRS would otherwise send you.
• •Not reporting cash income: the IRS receives copies of every 1099 that was issued in your name.
• •Wrong filing status: using Single when Head of Household applies can cost you hundreds of dollars.
• •Skipping the standard deduction: for 2025 it's $14,600 (single) or $29,200 (married jointly). Most people are better off taking this than itemizing.
• •Missing the October deadline: if you file for an extension in April, October 15 is your final deadline. The extension is for filing, not for paying. Any taxes owed are still due April 15.

What Happens If You Don't File?

If you don't file, the IRS may prepare a return on your behalf, called a "substitute return." The problem: it won't include your deductions or credits. It's almost always worse than if you had filed yourself.

The penalties are real:

• •Failure to file: 5% per month on the amount owed (up to 25%)
• •Failure to pay: 0.5% per month on unpaid taxes

And to be clear: the IRS does not report filers to immigration authorities. That protection is federal law under IRC § 6103. Filing taxes is not a risk for your immigration status, and in many cases, it creates a positive paper trail.

Your First Tax Return Doesn't Have to Be Complicated

With the right documents and the right guidance, filing for the first time in the U.S. is very manageable. The system rewards people who file correctly, with refunds, credits, and a clean financial record.

At VRG, we help immigrants file correctly from year one, whether you have an SSN or ITIN, whether you're an employee or self-employed. Call us at +1 786-747-7344 or reach out on WhatsApp.

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Legal Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws change frequently. Please consult a qualified tax professional before making decisions about your specific tax situation. VRG Tax Services is a tax preparation service and does not provide legal advice.