Moving to the US: Tax Checklist for Your First Year

Understanding Your Tax Residency Status

Before diving into specific actions, you need to understand when you become a US tax resident. This is not always the day you arrive.

The Substantial Presence Test

The IRS uses the substantial presence test to determine residency. You are considered a resident alien if you are present in the US for at least 31 days during the current year AND present for 183 days during a 3-year period (counting all days in the current year, 1/3 of days in the first preceding year, and 1/6 of days in the second preceding year).

Dual-Status Tax Year

Most newcomers experience a "dual-status" tax year — part of the year as a nonresident, part as a resident. During your nonresident portion, only US-source income is taxable. During your resident portion, worldwide income becomes taxable.

Before You Leave Your Home Country

• File final tax returns in your home country
• Obtain tax clearance certificates if required
• Understand if your home country has a tax treaty with the US
• Gather last 3 years of tax returns from your home country
• Bring bank statements showing account balances on your departure date
• Bring documentation of assets you are bringing

First Month in the US: Immediate Actions

Get Your Tax Identification Number

You cannot file taxes without a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

• If you have work authorization: Apply for an SSN at your local Social Security office. You will need your passport, visa, and I-94 arrival record. Processing takes 2–3 weeks.
• If you do not have work authorization: You will need an ITIN instead. Apply using Form W-7 when you file your first tax return.

Months 2–3: Understanding What You Owe

Determine Your State Tax Obligations

Federal taxes are just the beginning. Most states also impose income tax, and rules vary significantly. Some states like Texas, Florida, and Nevada have no income tax. Research your specific state's requirements or consult with a tax professional.

Set Up Estimated Tax Payments

If you are self-employed, receive investment income, or your employer does not withhold enough tax, you will need to make quarterly estimated payments. Quarterly deadlines: April 15, June 15, September 15, January 15 of the following year.

Months 9–12: Preparing for Tax Filing

Understanding the Dual-Status Return

Your first tax return will likely be a dual-status return. Form 1040NR covers your nonresident period (US-source income only). Form 1040 covers your resident period (worldwide income). You cannot use standard tax software for dual-status returns — you will need to file by paper or work with a tax professional.

Common First-Year Mistakes to Avoid

• Assuming you are not a tax resident yet — if you meet the substantial presence test, you are a resident from your arrival date.
• Not reporting foreign income — once you are a resident, ALL worldwide income is taxable.
• Ignoring state tax filing requirements — most states require separate filings.
• Not keeping adequate records — the IRS can audit returns up to 3 years after filing. Keep all documentation for at least 7 years.
• Depositing large sums without documentation — always have documentation showing the legitimate source of funds transferred from abroad.

When to Seek Professional Help

Your first year's tax situation is almost always complex enough to warrant professional assistance, especially if you have income from multiple countries, foreign financial accounts, are self-employed, or are unsure about your residency status. The cost of professional help is far less than the penalties for incorrect filing.

Need help with your first-year tax filing? Welfo specializes in tax services for immigrants and international taxpayers. Contact us for a consultation.

Phone: (279) 999-2788  |  Email: info@welfo.us