Junio 24, 2024
What are the most common tax filing issues for those with H-2A visas?
Many H-2A workers believe they're exempt from all U.S. taxes. This isn't the case. Even though employers aren't required to withhold money from your wages for federal or state taxes, compensation for H-2A workers may need to be reported on a U.S. federal income tax return after the end of the tax year and may be subject to federal and/or state taxes.
Employers may incorrectly deduct Social Security and Medicare taxes from an H-2A worker's pay, even though workers don't have to pay these taxes. Employers may mistakenly withhold these taxes.
Employers may incorrectly issue an H-2A worker a Form 1099-MISC or Form 1099-NEC instead of a Form W-2 to report their earnings for the year.
Being treated as a resident alien for tax purposes when you haven't met the Substantial Presence Test.
Using an incorrect filing status.
Claiming exemptions or credits such as the Child Tax Credit for children living outside the U.S. who aren't U.S. citizens.
Very few tax preparers are familiar with guest worker taxes, leading them to prepare incorrect types of returns, confuse immigration status with tax residency, and not know how to deal with spouses and dependents.
Where can I get help preparing my return, who can I trust, or seek help in filing a tax return?
One should go to a tax return preparer. There are various types of tax return preparers, including certified public accountants, enrolled agents, attorneys, and many others without a professional credential. Most tax return preparers provide exceptional and professional tax services. However, every year, some taxpayers are financially harmed because they choose the wrong tax return preparer.
What are some of the most common issues with tax preparers?
Beware of tax preparers who:
Refuse to sign the tax return and/or do not provide a copy of the return to the taxpayer.
Promise a large refund before beginning the tax return.
Ask for your passport or SS card and keep them.
Require cash-only payment and do not provide a receipt.
Invent income to qualify their clients for tax credits.
Claim false deductions to increase the refund size.
Direct refunds to their bank account, not the taxpayer's account.
Base their service cost on the amount of refund you will receive.
What should I look for in a tax preparer?
Make sure to use a preparer with a PTIN. Paid tax return preparers must have a PTIN to prepare all or substantially all of a tax return.
Use a reputable tax professional who enters their PTIN on the tax return, signs the tax return, and provides you with a copy of the tax return (as needed).
Consider whether the person or company will be present for months or years after filing the tax return to answer questions about tax return preparation.
Never sign a blank tax form.
Beware of tax preparers who claim they can get larger refunds than others.
Avoid tax preparers who base their fees on a percentage of the refund or offer to deposit all or part of your refund into their financial accounts.
Verify the credentials of the person if possible.
Remember that:
A tax preparer must provide the taxpayer with a complete copy of the tax return or refund claim filed with the IRS.
The law requires paid tax preparers to sign their tax return by name, without exceptions. Always verify that they signed the "Preparer's signature" line on your state and federal tax returns.
A fraudulent tax preparer will commit tax fraud on your tax return to get a larger refund and charge you a large fee based on that refund. When the IRS finds out, you may be responsible for paying any additional tax, interest, and penalties, not the preparer.
Are there free or low-cost resources for filing a tax return?
There are several options for filing your tax return:
Use IRS Free File: IRS Free File allows eligible taxpayers to prepare and file federal tax returns online using a guided tax preparation program. It's secure, easy, and at no cost to you. Those who don't qualify can still use Free File's interactive forms.
Visit the IRS Volunteer Income Tax Assistance (VITA) site. These sites offer free tax help to people who need assistance in preparing their own tax returns, including: people who generally earn $60,000 or less (this amount changes annually), people with disabilities, and taxpayers whose first language is not English. To locate a VITA site, call 800-906-9887.
Visit https://www.getyourrefund.org/es, a free virtual service supported by the IRS, the U.S. Department of the Treasury, and the White House that helps low-income households across the United States receive high-quality tax services from the comfort of their homes.
Reminders/Alerts:
Some tax preparers promise taxpayers help in getting stimulus checks, even if they weren't in the United States in 2020 or 2021 but have a Social Security number. If you weren't a U.S. citizen in 2020 or 2021 and weren't physically present in the United States at any time during those years, you are not eligible to claim the Recovery Rebate Credit, even if you have a Social Security number.
Always make sure your tax preparer is qualified. If you pay a preparer, make sure they:
Have a Preparer Tax Identification Number (PTIN).
Write their name and PTIN on the tax return and sign it.
Give you a copy of the tax return and their business card in case you encounter any issues in the future.
Remember that the Community Tax Law Project can help and guide you with tax-related doubts and questions in the United States. Contact them at 804-358-5855 for more information if you are in Virginia, or contact the Low-Income Taxpayer Clinic in your state.
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