Many Brazilians moving to the U.S. do not realize that, despite being foreigners, they must report their earnings during the year. The reason is simple: many people believe that since they still file income in Brazil and are not American citizens, they do not need to report to the American ‘Lion.’ This is a big mistake.
Just like in Brazil, here in the U.S. we also need to file a tax return, and here, this is taken very seriously. So seriously, in fact, that most people rely on professionals to handle the entire filing process, given the fear of falling into the dreaded ‘audit’ or even going to jail. The Internal Revenue Service (IRS) is one of the most feared institutions in America, to the point of exempting people from paying income tax if they report someone trying to cheat the IRS, did you know?
The refund period occurs between January and April, with some exceptions, and during this time of year, accounting offices operate at full capacity.
It is only worth hiring a professional to file your return if your earnings are high, or if you have multiple items to declare with many different forms, or if you really do not feel secure doing it alone. Otherwise, it is more worthwhile to use an online filing service, as it is much cheaper than hiring an accountant.
On many websites, the charge for the service is only $12.00.
When your employer withholds part of your salary for taxes, these amounts are transferred to the IRS throughout the year. The IRS requires everyone to make periodic payments throughout the year; however, your employer takes care of this for you.
This will depend on each person’s situation, whether they are an employee of a company and had deductions from their pay throughout the fiscal year or not, whether they are self-employed and paid taxes during the fiscal year or not, whether they are a student, whether they are a permanent resident or not, whether they received money through a lottery or inheritance, whether they bought or sold a car or property, whether they are married or single, etc. The list of forms is quite extensive.
When you prepare your federal return and calculate the amount of deductions, the amount withheld by employers must be subtracted from your tax bill. After doing this calculation, you will know whether to expect a refund from the IRS or to pay additional tax. If you file a state income tax return, the same calculation is done to pay your state income taxes or for the municipality where you live.
The identification information section of the W-2 is a tracking feature. If the income you report on your taxes does not match the information on your W-2, the IRS will want to know why. They will verify that your data matches the data of the person who paid those amounts reported on your employer’s corporate tax return to ensure everything is ‘in order.’
Once the IRS receives a copy of your W-2, they already know if you need to report earnings and may contact you if you do not file. If the name or Social Security number on your W-2 is inaccurate, you must immediately inform your employer so they can correct it.
For those who are self-employed, the form used is different; it will be the 1099-MISC, which you must receive from each client who paid you at least $600 during the fiscal year.
For example, if you provide consulting services, you are usually hired by different clients throughout the year. Thus, all payments you receive (totaling at least $600 a year) must be reported on the 1099-MISC form.
Foreign students here do not have income, as they do not have permission from the U.S. government to engage in paid work legally, as they must be here solely for the purpose of studying. However, even these students must send a form to the IRS declaring that they were present in U.S. territory in the previous fiscal year but had no income and therefore did not pay taxes for this reason. Every international student (with or without dependents) must declare using form 8843.
Additionally, every student who pays tuition, registration fees, or has other education-related expenses must receive from the educational institution the 1098 form to be reimbursed for these expenses. Remember: the deadline for submitting the tax return for students without income goes until June, unlike the deadline for people with income.
The foreign student with income must file according to the type of employment they have. The form will vary according to the type of activity and how much you earn. The important thing is to check your type of employment and file the return to avoid problems in the future. If you are unsure how to file or which forms to fill out, inquire at your school or college. Almost all American educational institutions hold free workshops during the filing period, helping their students report their earnings correctly.
When you finish your tax return, one copy stays with you and the other must be sent to the IRS. You can do this by mail or online.
The refund can be via direct deposit or through a check that will be sent to the address you provided to the IRS. Choose one of the options on your return.
For more information about income tax in the U.S., visit the website www.irs.gov.
LORRANE SENGHEISER
Promotion and Trade Policy Advisor
Source: http://brasileiraspelomundo.com