New to the U.S.? A complete tax guide for new immigrants

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.

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.

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 while you are a U.S. tax resident (in a dual-status arrival year, foreign income from before your residency starting date generally isn't taxed)
• 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.

Step 3: Get your tax identification number

To file a tax return, you need a tax identification number. There are two options:

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 — the civil penalty maximums are set by law and adjusted for inflation each year, and criminal penalties may also apply.

Step 5: Understand the key deadlines

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 — $15,750 for single filers in 2025 (resident aliens only; nonresident aliens generally cannot claim the standard deduction)
• Child Tax Credit — up to $2,200 per qualifying child under 17 (Tax Year 2025), if the child has a valid SSN and you (or your spouse, if filing jointly) have a Social Security Number valid for employment — an ITIN is not enough
• 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 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 an available residency election — If you became a resident alien partway through the year and were married to a U.S. citizen or resident at year end, you and your spouse may be able to choose to be treated as residents for the entire year and file jointly, which avoids the dual-status restrictions (but taxes both of you on worldwide income for the whole year). Separately, the first-year choice can let someone who arrives late in the year be treated as a resident for part of that year; it can't be revoked without IRS approval. Get advice before making either choice.
• 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.