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How to Pay Your Taxes When You Live in United States

Tax in itself is a responsible topic; US tax legislations require all the more responsible approach from individuals residing in the country whether or not they are a U.S. citizen. Federal tax laws require US citizens and even resident aliens to file their income tax return. In that case, resident aliens coming to the US for work who are deriving their income in the US need ITIN as the tax return cannot be filed without a unique identification number.

ITIN or the Individual Taxpayer Identification Number is a tax processing 9-digit number issued by the Internal Revenue Service to all those resident aliens who do not have a Social Security Number (SSN) yet. ITIN is also mandatory for a dependent or spouse of a U.S. citizen/resident alien and also for the dependent or spouse of a nonresident alien visa holder.

One important point to note for U.S. resident aliens is that they are required to report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income in their U.S. tax return. The highlighted point here is that all such incomes need to be disclosed and reported even if they are earned outside the United States! Even the resident aliens living in the US claimed as dependent, need to file their federal tax return disclosing their income earned in the US and abroad.

One needs to express their income earned in US Dollars in their US tax return. So if you have received some part of your income in Pounds or Euros, do not forget to convert it into dollars. Generally, the annual average exchange rate is used for conversion.

Now the lucrative point while filing your tax return as a US resident alien is that you can claim personal exemptions and exemptions for dependents according to the dependency rules for US citizens. So if you have a spouse with no gross income for US tax purposes and he or she has not been dependent on another taxpayer, you can claim an exemption for your spouse in your return.

But to claim this exemption, your spouse and each dependent person mentioned in your tax return must have either a SSN or an individual taxpayer identification number (ITIN)! The details of other exemptions and deductions along with the timeline of filing your tax return are there on the official IRS website.

In case of any issues regarding US tax regulations; you can have a look on various websites available online.



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