Your first U.S. tax year doesn't have to be confusing
Moving to the United States means navigating a new tax system — one that works very differently from Taiwan, China, or most other countries. The good news is that the core concepts are learnable, and once you understand the fundamentals, most of the complexity resolves itself.
This guide walks you through the most important things every new immigrant needs to know about U.S. taxes — in the order that actually matters.
Before anything else, you need to determine your tax residency status. This determines which tax forms you file, what income you must report, and what deductions and credits you can claim. Everything else in this guide flows from this one determination.
Step 1: Determine your tax residency status
The U.S. taxes people differently based on whether they are a resident alien or a nonresident alien. Despite the names, this has nothing to do with your immigration status — it's purely a tax classification.
Resident alien
If you are a resident alien, the U.S. taxes you on your worldwide income — everything you earned anywhere in the world. You file using Form 1040, the same form U.S. citizens use.
You are a resident alien if either of these is true:
- You have a green card (Lawful Permanent Resident status), or
- You pass the Substantial Presence Test (see below)
Nonresident alien
If you are a nonresident alien, the U.S. only taxes your U.S.-source income. You file using Form 1040-NR, which is a different, more limited return.
The Substantial Presence Test
If you don't have a green card, the IRS uses the Substantial Presence Test to determine your status. The test counts the days you were physically present in the U.S.:
- All days present in the current year, plus
- 1/3 of days present in the prior year, plus
- 1/6 of days present in the year before that
If this total equals 183 or more, and you were present at least 31 days in the current year, you are a resident alien.
F-1 and J-1 visa holders are "exempt individuals" — their days in the U.S. on those visas don't count toward the Substantial Presence Test for the first 5 calendar years (F-1) or 2 calendar years (J-1). Most international students file as nonresident aliens and use Form 1040-NR.
Step 2: Understand what income you must report
If you are a resident alien
You must report all income from all sources worldwide. This includes:
- Wages and salary from U.S. employers (reported on W-2)
- Freelance or self-employment income
- Investment income (dividends, capital gains)
- Rental income from U.S. or foreign properties
- Income earned in Taiwan, China, or any other country before or after moving to the U.S.
- Business income
If you are a nonresident alien
You must report income that is effectively connected with a U.S. trade or business, and certain types of U.S.-source income (like dividends, interest, and rent). You generally do not report foreign-source income.
If you became a U.S. tax resident partway through the year — for example, you arrived in March and passed the Substantial Presence Test by year-end — you are a "dual-status alien." You were a nonresident for part of the year and a resident for part. Dual-status returns are more complex than standard returns and almost always require a tax professional.
Step 3: Get your tax identification number
To file a tax return, you need a tax identification number. There are two options:
| If you have... | You need... |
|---|---|
| Work authorization (H-1B, green card, EAD) | Social Security Number (SSN) — apply at a Social Security Administration office |
| No work authorization (F-1 student, dependent visa, tourist) | ITIN (Individual Taxpayer Identification Number) — apply with Form W-7 |
An ITIN is not a work permit and does not affect your immigration status. It simply allows you to fulfill your U.S. tax obligations, receive refunds, and claim certain tax credits. See our full ITIN guide →
Step 4: Know your foreign account reporting obligations
This is one of the most commonly missed obligations for new immigrants from China and Taiwan.
If you have bank accounts, investment accounts, or other financial accounts outside the U.S. with a combined maximum value exceeding $10,000 at any point during the year, you are required to file an FBAR (Foreign Bank Account Report) with FinCEN.
This is separate from your tax return. It's due April 15 with an automatic extension to October 15. Penalties for failing to file can be severe — up to $10,000 per violation for non-willful failures.
Many new immigrants believe they don't need to file FBAR because they don't owe taxes on the foreign accounts. This is incorrect. FBAR is a disclosure requirement, not a tax. The obligation exists regardless of whether the accounts generated taxable income.
Step 5: Understand the key deadlines
| Deadline | What's due | Who it applies to |
|---|---|---|
| April 15 | Federal tax return (Form 1040 or 1040-NR) | Most taxpayers |
| April 15 | FBAR (FinCEN Form 114) | Anyone with foreign accounts >$10,000 |
| June 15 | Tax return for U.S. citizens/residents living abroad | Special cases |
| October 15 | Extended deadline (if extension filed by April 15) | Anyone who filed Form 4868 |
Step 6: Tax benefits you may qualify for
Being a new immigrant doesn't mean you miss out on tax benefits. Depending on your situation, you may qualify for:
- Standard deduction — $14,600 for single filers in 2024 (resident aliens only; nonresident aliens generally cannot claim the standard deduction)
- Child Tax Credit — up to $2,000 per qualifying child under 17, if you have a Social Security Number or ITIN
- Foreign Tax Credit — if you paid taxes to another country on income also taxed by the U.S., you may be able to credit those foreign taxes against your U.S. tax bill
- Tax treaty benefits — the U.S. has tax treaties with many countries (including China, but not Taiwan) that may reduce or eliminate certain types of U.S. tax on treaty country residents
The U.S. has a tax treaty with China that provides certain benefits for Chinese nationals — including reduced withholding on dividends and possible exemptions for students and researchers. The U.S. does NOT have a formal tax treaty with Taiwan. However, there is a Taiwan Relations Act that provides some similar protections. If your situation involves income from either China or Taiwan, consult a tax professional who is familiar with both countries' systems.
The most common mistakes new immigrants make
- Filing as a resident when you should file as a nonresident (or vice versa) — Getting residency status wrong is the most consequential error. It affects every other part of your return.
- Not reporting foreign income — Resident aliens must report worldwide income. Many new immigrants don't know this applies to them.
- Forgetting FBAR — This is separate from your tax return and has its own filing system. Missing it can result in significant penalties.
- Missing the first-year election — If you became a resident alien partway through the year, you may be able to elect to be treated as a resident for the entire year, which can simplify your return and unlock additional deductions. This election must be made on your return — you can't change your mind later.
- Assuming your employer handled everything — Your employer withholds taxes from your paycheck, but they don't file your return. You are responsible for filing, reporting all income, and claiming any additional obligations like FBAR.