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I should file Tax Return ？" ---Basics of U.S. Taxation that you may not know

Should I File a Tax Return ？ The Basics of U.S. Taxation That You May Not Know"

1. Introduction ： Unexpectedly many "people who really need to file a tax return"
"Do I need to file a tax return? ？ "Do I need to file a Tax Return?

- I received withholding tax in Japan …
- I retired and my income is low …
- My company is withholding …

Many people think that they have to file a Tax Return （ tax return ） but they do not file it.
However, failure to file can lead to serious risks later, including additional tax ・ penalties ・ and adverse effects on the immigration process.
This article explains
✔ whether you are eligible for Tax Return
✔ and
what the benefits of Tax Return are.

2. What is Tax Return （ Tax Return ） in the first place ？
In the US,
• even if taxes are withheld from your salary
• and your company issues W-2 or 1099
the individual is still responsible for properly calculating and reporting his/her annual income to the IRS.
The taxpayer cannot rely on the company to "do it all" and the ultimate responsibility is the taxpayer him/herself.

3. Who "must" file a Tax Return ？
（ Those whose income exceeds a certain amount Most typical ） （ See ： Image 1 ）
Age ・ There is a threshold amount for each filing status and it is determined if the threshold amount is exceeded.
• Salary
• Self-employment income
• Investment income
• Foreign income
All of these are included.

(2) Self-employment （ sole proprietorship ） income in excess of $ 400 per year
Uber, freelance, influencer income, etc
→ even if amount is small $ over 400, you are obliged to file a tax return.

(3) Nonresidents with US source income （ 1040NR ）
• Dividends from US investments ・ Interest
• US real estate income
• Studying abroad and taxable scholarship
• Part-time work in the U.S.
etc. must be reported on a 1040NR.

Cases where even dependents or spouses with (4) ITIN need to file
e.g. investment income or interest on US accounts.

4. Conversely, people who are not required to file but "should" file
(1) Withholding is too high → Refund is available
Tax is taken from your wages If this is the case, you must declare it or you will not get it back.
(2) Education Expenses ・ Child Credit
• Child Tax Credit
• American Opportunity Credit
and other refundable credits that you must report to get. Credits are available.
(3) People whose Social Security or Medicare records are affected
Self-employed people who do not file risk having their future pension （ SSA ） reduced.

5. Advantages of Filing a Tax Return
Benefits ① Money Back （ Potential Refund ）
It is not unusual for the amount returned to be several thousand dollars.
Advantages ② Advantage in immigration process （ Visa ・ Green Card ）
Failure to declare
• Renewal of status
• Green Card
• Permanent Residency Application
Many times you will be asked why you have not filed.
Advantages ③ Reduce risk of later IRS investigation
Not filing is the most dangerous situation.
If you file a return, it is easier to prove if a tax audit comes later.
Benefits ④ Past subsidies ・ Tax credit payments
Corona benefits distributed during the pandemic （ EIP ） were not received because "people did not file a Tax Return. There were large numbers of people who "did not receive the benefits because they did not make a Tax Return. Some subsidies and credits can be received later by filing a Tax Return （ within 3 years ）.

7. Summary ： Check with an expert to see if you are eligible
Tax returns are becoming more complex every year, and it is easy to make a mistake if you do not have expertise in determining residency, bilateral taxation, credit systems, etc. It is very easy to make a mistake if you don't have any specialized knowledge.
"I don't know if I need to file"
"I feel like I have to file"
If so, consulting with a professional can greatly reduce your risk of
missing a tax refund ・ in the future.

At Aohama Accounting Office, we can
• diagnose whether a tax return is necessary
• suggest the best way to file
• 1040 ・ 1040NR ・ self-employment International student cases
• Foreign income （ Including Japan ） We provide professional support for
handling
For a free initial consultation, please contact us via email ！ info@aohama.com