U.S. citizens and resident aliens (green card holders and individuals present in the United States for a specified long period of time), must report income from all sources within and outside of the United States. To many new green card holders this comes as a surprise leaving them with limited legitimate means of tax planning and optimization.
U.S. federal income tax rates are assessed on the income of new tax residents in addition to the state level income taxes. There are also a series of other taxes, such as gift and estate taxes, self-employment taxes and the like.
U.S. income tax is assessed on individuals based on their income level (referred to as the “tax bracket”) and their marital status. A number of deductions and exceptions may be applicable to each situation, which effectively can reduce the income subject to taxation.
Please keep in mind that the tax rates listed in these
tables are marginal rates. This means that you do not owe your rate on all of
your income. For example, if you are single and you earn $100,000 per year, you would not owe 28% on all of your income —
you would not owe $28,000 to the federal government. You would owe 10% of
$8,925, 15% of $27,325 (the difference between the top and the threshold of the
second tax bracket), 25% of $51,600, and 28% of $12,150 (the difference between
your income and the threshold of the third tax bracket). That calculation
results in $21,293, or an effective (not marginal) tax rate of 21.2%. That will
be further reduced by any credits, deductions and exceptions you are eligible
for.
The Law Office of Daria S Brovchenko offers pre-immigration and post-immigration planning sessions aimed and raising the awareness of the soon-to-be or new green card holders in relation to their new tax liabilities in the United States. By providing the relevant guidance and assistance, we are able to help our clients minimize their tax burden and prepared them for becoming U.S. tax residents.
Please contact the Law Offices of Daria S Brovchenko to speak with a tax attorney.
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The Law Offices of Daria S. Brovchenko are located in San Diego, CA. We represent clients throughout Southern California including, San Diego, Los Angeles, Poway, Vista, Chula Vista, El Cajon, Coronado, La Jolla, Pacific Beach, Oceanside, Carlsbad, Encinitas, Escondido, Rancho Bernardo, Del Mar, Solana Beach, Scripps Ranch, La Mesa, Lakeside, Eastlake, Bonita, Anaheim, Santa Ana, Newport Beach, San Diego County, Orange County and Riverside County. We also represent clients globally, including Russia, China, Italy, Japan, Brazil and Mexico.