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It’s tax season, and as paperwork starts coming in knowing exactly what you need to file can save you time and frustration.
First of all, it’s important to know if you’re even required to file. In Massachusetts, full-time residents with a gross income over $8,000 as an individual must file a state tax return for 2022. For federal taxes, the minimum for an individual starts at $12,950. But if you’re considered self-employed, the filing requirements may look different. For a full breakdown of the income requirements for other scenarios, click here for state requirements and click here for federal.
If you’ve earned less than that filing may not be required, but there can be benefits to doing so.
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“Anybody who works in tax year 22, which is last year that we're doing, received any tax forms, any, any income. You are welcome to file taxes, to claim any eligible credits and also to get any withholdings back,” explained Bianny Suncar of Action for Boston Community Development, which offers free tax preparation services to eligible residents.
Suncar, who is the director at the Mattapan Family Service Center, said keeping organized and asking questions are the key to successful tax preparation.
What do you need to get started on your taxes?
“To get started, you would need your identification, your Social Security number or ITIN. All of your tax documents. So if you working W-2 or 1099, proof of health insurance because it is a Massachusetts mandate to have insurance and anything else that would be beneficial for us to know for tax purposes, if you have children, maybe information about child care, their Social Security numbers for that, so that we can so we're able to get the child tax credit and other credits. And it's just, you know, anything else that would be advantageous for us to know.”
What if I am undocumented but still want to file taxes?
There can be benefits to filing taxes as an undocumented immigrant. If you’re in that scenario, you’ll need to obtain an ITIN, which requires filling out a form called a W-7. This is a situation where you may want expert help - ABCD will generally refer clients with an ITIN out to Greater Boston Legal Services, an organization that can offer more in-depth information about how to file a return in that scenario.
“We will definitely refer those out because we want to make sure that the client or the taxpayer is able to properly document their earnings,” Suncar said. “They want it to be assigned a number so that those wages can be calculated properly and they are able to get back what they need.”
The Low Income Taxpayer Clinic of Greater Boston Legal Services helps immigrants navigate tax preparation.
"If you're earning income in the US, you're subject to tax laws regardless of where you're from, regardless of your immigration status. It doesn't matter if you've got a Social Security number. You're still subject to tax laws in the country," explained Angela Divaris, an attorney who works for the clinic.
"The IRS has a way of allowing people who are not eligible for Social Security numbers to file their taxes with items or individual taxpayer I.D. numbers. So if you don't have a Social Security number but are earning income, you can request from the IRS an item and file your tax return with that number," Divaris added.
That brings us back to the ITIN. In order to get an ITIN, you'll need to also file a tax return to prove there is a reason for you to have that identification number. You'll need to provide proof of identification - the most commonly used form is a passport.
Divaris said there are many barriers for filers who need to use an ITIN. It can be difficult to find somewhere to certify your passport. Language barriers can be a problem. And of course there can be the fear that giving your information to the IRS could be used as an immigration enforcement tool. Divaris said the IRS is interested in your tax obligations, not your residency status.
"If you're undocumented and you're giving all your information to the government, people are understandably worried about that. But this is another area where, you know, immigration and IRS are separate entities for government and there are privacy rules that protect people. And the IRS really is interested in seeing your tax returns. The ITIN is not an immigration enforcement tool."
"Most of the people coming forward who want to file tax returns, it's because they want to participate and they already participating in the economy. They want to comply with the tax laws. And it's important to make the to understand that we should recognize that immigrants are taxpayers. They...they add to our economy as workers, taxpayers, entrepreneurs and they don't necessarily get all the tax benefits."
ITIN holders may not be eligible for all the tax credits someone with a social security number can apply for. The situation can be made more complicated if ITIN holders have a dependant who does have a social security number.
"For example, if you have a Social Security number and your low income or moderate income, a very big answer, a huge anti-poverty tool is the Earned Income Tax Credit. That is a refundable credit. It puts cash in people's pockets. It's seen as designed as an anti-poverty tool to help families, and it could be worth many thousands of dollars. But an ITIN is not eligible to to file for that, to claim that if as an ITIN holder. You could claim a five for a smaller $500 credit for other dependents, but it's not refundable and it will reduce the tax that you're owed, but you might be eligible for it," Divaris said.
She adds that filing a tax return can also reflect positively during an immigration case.
"It doesn't have an immediate immigration effect. But in the future, it might be proof of good moral character. If that's part of an immigration petition, it's proof that you your presence in the country."
What kind of income needs to be reported on my taxes?
With record inflation over the last year, many people have looked to side hustles or started their own side businesses to make extra money. All of your income from those sources needs to be reported.
“So whether that's wages, you know, you receive a W-2 or you're working with an employee receive wages, you will file that maybe Uber, Uber and Lyft driving as an example. You get a 1099-K form for that also gets reported, but it will get reported under another type of form. Maybe you get some side hustle. You got cash income, but also would be documented as earned income. So anything received that is considered income gets reported,” Suncar explained.
If you have a small business, you’ll need a clear sense of the business earnings and expenses.
“It's really important to keep like an accounting record. It could be really simple, just like, okay, all the incomes that I got in one line and then all the expenses in that way, bring it to your tax preparer and the able to put that information to make sense for the taxes.”
What kind of paperwork should I receive from my income sources?
The exact forms you receive will depend on what you do for work and how you’re being paid. Some of the most commonly seen are W2s and 1099s.
“W2s are really if you're in an agency, an organization, you're full-time employee. they'll issue out a W2 and that will just have a summary of all of the earnings at that particular organization for the year. If you're considered self-employed, you might get a form that's called 1099 NEC, And so this is a non-employee compensation form. So you're not an employee with that organization, but you're doing like a consulting or you're self-employed. Consider self-employed. So those will be issued out in a 1099 form,” Suncar said.
If you got paid in cash, that should also be reported. If you weren’t provided any forms by your employer, you should provide your own record, such as deposits into a bank account, so you have an accurate idea of your income.
Divaris adds that filing requirements are different if you're paid in cash - anything over $400 should be reported.
"If you're getting cash income, you still could have a filing requirement, especially if the IRS thinks you're self-employed, If you're filing as a self-employed person. And you know, with the whole gig economy people, there's more and more people getting paid that way. If even if you've got $400 in earnings, you have a filing requirement, you're supposed to file a tax return," she explained.
Do I need different forms for my federal and state taxes?
While you’ll need to file federal and state taxes separately, most of the paperwork you need to collect will be the same. In Massachusetts, your state taxes are reported to the Department of Revenue, and federal taxes will be filed with the IRS.
“The differences will be just the amount of taxes that somebody is paying. So on the federal side a little higher than in a state. The state's a little it's a little less. And then there are certain things that you can claim on it that you can't claim in the other. So everything that transfers over our credits, like the child tax credit, the Earned Income Tax Credit, all made information on the federal side. And then on the state side, you know, we focus on you know, we lived here all year. Did you pay rent and any other thing that is, particular like health insurance for the state.”
In Massachusetts, the major difference in paperwork will be health insurance, because the state requests more specific information on that.
How do I know what tax credits I’m eligible for?
There are state and federal tax credits available – you can read up on the state offerings here and the federal options here. Suncar said it’s important to note that there have been big changes in the 2022 tax year, so just because you qualified for something last year doesn’t mean you will this time.
“During the pandemic, a lot of the credits, what amounts were either increased or the eligibility requirements were changed. And so for this year, for tax year 22, all of the eligibility requirements and the guidelines are reverting back to the pre-pandemic years. So, for example, the child tax credit was increased last year for children under six years of age to 3600. But this year in tax year 22, the credit reverted back to 2000 for any child who under the age of 17,” she said.
Where can I go for help with my taxes?
There are various paid tax preparation services available if you’re not comfortable filling out the forms alone. There are also free resources available if you meet certain requirements, such as making less than $60,000 a year, live with a disability or speak limited English.
“ABDC is part of the IRS VITA Volunteer Income Tax Assistance program, where we have IRS certified volunteers prepared and ready to get proper taxes for free as long as you are fall under $60,000 or less of income and live in the city of Boston, Malden, Medford or Everett. But there's VITA sites all over Massachusetts. So if you don't live in Boston, for example, you're able to go to the IRS website and search by the sites and those are completely free,” Suncar said.
You can look up VITA sites in your area using the IRS lookup tool here. https://irs.treasury.gov/freetaxprep/
More free tax preparation resources are available here: https://www.masscap.org/freetaxprep/
The Low Income Taxpayer Clinic of Greater Boston Legal Services can help immigrants and other low-income earners navigate tax preparation. They can be reached at email@example.com.
Other tax clinics are available here:
|Low Income Taxpayer Clinic|
Rhode Island Legal Services, Inc.
56 Pine Street, 4th floor
Providence, RI 02903
(401) 274-2652 firstname.lastname@example.org
|Greater Boston Legal Services, LITC|
197 Friend Street
Boston, MA 02114
(617) 371-1234 email@example.com
|Vermont Low Income Taxpayer Project |
Vermont Legal Aid, Inc. 264 North Winooski Ave.
Burlington, VT 05402
(800) 889-2047 firstname.lastname@example.org
|603 Legal Aid Low-Income Taxpayer Project |
93 N. State Street, Suite 200
Concord, NH 03301
|Federal Tax Clinic of |
the Legal Services Center at Harvard Law School
122 Boylston Street
Jamaica Plain, MA 02130
(617) 390-1729 email@example.com
|Low Income Taxpayer Clinic Northeast Legal Aid |
50 Island Street, Suite 203A
Lawrence, MA 01840
(978) 458-1465 firstname.lastname@example.org
Taxes may seem overwhelming, but Suncar said the most important thing is organization.
Be organized, ask questions, be able to just double-check that all of the credits that you think that you're eligible for are in there before you leave. And if for some reason, you know, you leave the tax preparation office and then you have questions, just call back and we're happy to answer. Don't feel like you're not part of the process," she said.
It's best to start early but if you find yourself pressed for time, you can file for an extension! The set tax deadline this year is April 18 and extensions can run until Oct. 16.
"This is a time to come and get your taxes done. Don't wait till the last minute. The deadline is April 18th. We want to see you as soon as possible."