US taxes and immigration status: filing mistakes to avoid

Below is an explanation of what exactly gets checked, where applicants most often make mistakes, and which decisions you need to make before your first tax season, not after it.

How US Taxes Are Linked to Immigration Status

Three scenarios when your tax return becomes more than just a tax matter:

• Applying for a green card. If your return shows income from active work but you did not have work authorization at the time, an officer may see this as a status violation.
• Consular interviews and document requests during review. During administrative processing, tax records from both the applicant and their employer are often requested.
• No tax return filed at all. In the community, this is considered a major red flag.

Did you pay taxes? If yes, a tax return or a bank statement showing where the money was deposited will work. If you did not pay taxes, that's a big red flag for Americans.

The general rule in community discussions is: a missing tax return or questionable foreign income can raise issues when you later apply for a green card, especially if several years of tax records are requested at once.

When Do I Become a US Tax Resident?

For tax purposes, the IRS divides people into residents and nonresidents, which is not the same as immigration status. You can live in the US on a tourist visa and still be a US tax resident.

Status is determined by the number of days of physical presence according to the Substantial Presence Test, not by your visa. One community member broke down the IRS guidelines right in the chat:

I might be mistaken, please correct me if I'm wrong, but it seems you don't need a green card to be considered a tax resident. It's enough to meet the Substantial Presence Test criteria.

Two conditions must be met for the year 2026, both at the same time: at least 31 days of physical presence in 2026 itself, and at least 183 weighted days over a three-year period. The weight assigned to each day's presence decreases for earlier years:

The sum of these three lines is the result of the test. Here's what it looks like in numbers:

• In 2026, 130 days of presence count as 130 qualifying days.
• In 2025, 120 days count as 40.
• In 2024, 120 days count as 20.
• Altogether, that's 190 qualifying days. The 183-day threshold is met, so for the IRS, this person is considered a resident, even though they haven't spent a full year in the country.

The practical takeaway, phrased even more bluntly in community chats: regular long trips add up, and a person can become a resident without even realizing it.

Even if you spend four months a year in the US on a tourist visa just for vacation, you become a tax resident, and if you don't pay taxes yourself, you automatically become a violator and owe penalties and interest.

Do you need an SSN or ITIN to file a tax return?

A tax identification number is required for everyone filing a return, including spouses and children.

• SSN (Social Security Number) is issued to those who have work authorization in the US.
• ITIN (Individual Taxpayer Identification Number) is for those who aren't eligible for an SSN but are required to file a return. It's requested with Form W-7, usually together with the first return, and does not grant work authorization.

The most common practical problem is a Catch-22 with children and spouses who don't have an SSN:

Usually, dependents on work visas (L1, H1B, O1) get an ITIN when filing the return. In these cases, you include Form W-7, but you used to have to send a physical paper return with all your passports and documents, or schedule an appointment at the IRS office for this purpose.

Applicants often point out that not having an SSN for children costs the family certain tax credits, so it's best to resolve this in the first tax season.

What declaration mistakes create immigration risk?

The main issue concerns those who already live in the US in pending status and have not yet received a work permit (EAD).

However, earning income and having the right to work are different things, and this is frequently discussed in the community:

Without work authorization, you cannot work, but you can receive income. You can even be a CEO, provided you only do strategic management, attend exhibitions, or simply have an ownership stake. It depends on the type of company, but you can be a business owner in the US while living abroad and receive profits. The nuance is that if you earn profit in the US, you must file tax returns (1040-NR) and use an ITIN (which can be requested when filing your first return). If you have income, it's reported on a K-1 from the company, and you show it in your K-1 schedule as passive income and pay taxes on it. The same goes for dividends. You can be a student, own stock, and receive dividends from a US company-then it's a 1099-DIV. You are confusing the right to work with the right to income. These are absolutely different things.

This quote mentions three different arrangements that should not be confused: holding a share in a US company with profit distribution via a K-1, dividends on stocks reported with form 1099-DIV, and owning a company in the US from abroad. The common factor is that the money is not for hours worked. Passive income generally includes rental income, dividends and interest, gains from the sale of assets, and royalties from previously created intellectual property.

A legacy version of this page also included income from foreign business as passive only if you do not participate in its management from the US. However, the community does not universally support this, so consult a tax advisor about your specific situation. The exact company type also affects the answer-the community member points this out directly in the quote.

What to do about foreign accounts and assets

A US tax resident must report worldwide income, and in addition to your tax return, you may have to disclose the accounts themselves.

• FBAR (FinCEN Form 114). Required if your aggregate balance in accounts outside the US exceeded the threshold ($10,000) on any day of the year. The maximum balance during the year is counted-not just the balance as of December 31.
• FATCA (Form 8938). If you exceed certain thresholds for foreign financial assets, this form is filed with your tax return.

A common rule repeated in chats: it's up to each resident to monitor these thresholds, even if the bank does not automatically report anything.

The US and Russia used to exchange financial information under FATCA (Foreign Account Tax Compliance Act). As far as I know, Russia has now withdrawn from FATCA, but this does not mean that income received from Russia does not need to be reported.

Check the current thresholds and currency conversion rules before filing, as they change and amounts from old discussions are often outdated.

How to pay yourself a salary via your own company on an O-1

If your US company is the O-1 petitioner, payment arrangements change once the visa is approved.

Company reporting: Form 5472

A US LLC with a sole foreign owner (disregarded entity) and a US corporation with 25% foreign ownership have a special requirement: to file Form 5472, attaching it to the formal Form 1120. This is required for any reportable transactions with the owner - such as capital contributions, rental payments, loans - even if there was no revenue at all. It frequently comes up in chats among those who have filed for an immigration visa and also own an LLC.

What is the exit tax when giving up a green card

A long stay as a permanent resident changes the tax implications of giving up that status. The community discusses this as a separate topic:

If you held a US green card as a permanent resident for 8 of the last 15 years before giving up your green card, you may be classified as a "long-term resident". Special tax rules apply to such persons, including possible expatriation taxes.

This scenario is also called an "exit tax":

when you renounce citizenship or give up your green card, you will have to pay an "exit tax." The Tinkov case mentioned above is an example; it applies not only to citizenship renunciation but also to abandoning a green card.

Practical takeaway: if abandoning the status is even being considered as a scenario, you should calculate its cost before your eighth year, not after.

Common mistakes

Key points

1. Tax status is determined not by your visa, but by the Substantial Presence Test formula.
2. A resident reports their worldwide income, a nonresident only U.S. source income.
3. To file a tax return, you need an SSN or ITIN; dependent ITINs are requested via Form W-7 together with the first tax return.
4. Work authorization and the right to receive income are different: passive income can be lawfully reported, while active work without authorization creates immigration risk.
5. Foreign accounts and assets may require extra reports beyond Form 1040, and the resident is responsible for tracking thresholds.
6. The regular filing deadline is April 15; this is also the deadline for supplemental forms.

Official sources for verification:

• IRS: Substantial Presence Test
• IRS Publication 519 (U.S. Tax Guide for Aliens)
• FinCEN: Beneficial Ownership Information (BOI)

Frequently asked questions

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