Tax Filing in the USA: A Guide for Immigrants

Anyone who lives or works in the United States needs to understand their tax obligations with the Internal Revenue Service (IRS), the American Federal Revenue Service. For Brazilian immigrants, the U.S. tax system presents significant differences compared to the Brazilian model, requiring extra attention to avoid fines, interest, and legal complications. This guide covers the main concepts every immigrant needs to master: who must file, what to declare, how to avoid double taxation, and the obligations to report financial assets held abroad.

Who Must File Taxes

In the United States, the obligation to file taxes depends on your tax status, not just your income amount. In general, three groups of people must file a return with the IRS: American citizens (including those with dual citizenship), permanent residents (holders of a Green Card), and individuals who meet the so-called Substantial Presence Test. Even those in the U.S. on a temporary work visa may be classified as tax residents, depending on the length of stay in the country.

The return is filed annually with the IRS using specific forms, the type of which varies according to the taxpayer’s status. Understanding which category you fit into is the first step to properly fulfilling your tax obligations in the United States.

Worldwide Income and the IRS

One of the concepts that most surprises Brazilian immigrants is worldwide income. If you are a tax resident in the U.S., the IRS requires you to declare all your income, regardless of where it was generated. This includes salaries received in Brazil, rental income from Brazilian properties, profits from companies abroad, and capital gains from investments outside the United States. Even if these amounts have already been taxed in the country of origin, the obligation to report them to the IRS remains.

This principle is radically different from the Brazilian model, where taxation primarily falls on income from national sources. For immigrants with assets or sources of income in Brazil, tax planning becomes even more relevant to avoid errors in the return and penalties that can reach significant amounts.

Substantial Presence Test

The Substantial Presence Test is the criterion the IRS uses to determine if a non-immigrant foreigner should be treated as a tax resident. To meet the test, you must have been physically present in the U.S. for at least 31 days in the current year and total 183 days in a weighted calculation over three years. In this calculation, all days from the current year count, one third of the days from the previous year, and one sixth of the days from the year before that.

Holders of visas such as H-1B, L-1, and O-1 often meet this test and are treated as tax residents. Some categories have exceptions: students with an F-1 visa are exempt from the test for the first five years of stay, and researchers with a J-1 visa for the first two years. Determining tax status has a direct impact on the form used for filing and the scope of income to be reported.

Forms 1040 and 1040-NR

The IRS uses two main forms for individual income tax returns. The Form 1040 is intended for American citizens and tax residents, who must report their worldwide income. The Form 1040-NR is used by non-resident aliens, who declare only income from U.S. sources. The choice between one or the other depends exclusively on your tax status, determined by the Green Card test or the Substantial Presence Test.

Filing with the wrong form can create inconsistencies with the IRS and result in audits or penalties. Therefore, correctly determining your tax residency status is essential before starting the annual filing process.

Foreign Tax Credit

To avoid double taxation, the IRS offers the Foreign Tax Credit (FTC) mechanism, which allows you to offset taxes paid to foreign governments against the amount owed to the U.S. government. If you paid income tax in Brazil on certain income, you can use the FTC to reduce or eliminate U.S. taxation on that same income. The credit is claimed using Form 1116, which must accompany the annual return.

One point many Brazilian immigrants are unaware of: Brazil and the United States do not have a comprehensive treaty to avoid double taxation on all types of income. There is only a Totalization Agreement regarding social security contributions, in effect since 2018, as well as TIEA and FATCA agreements. In practice, the FTC is the main tool available for Brazilians to avoid paying taxes twice on the same income. Although the credit covers most situations, differences between the laws can result in residual taxation in specific cases, making planning with a specialized professional essential.

FBAR and FATCA Obligations

In addition to income reporting, tax residents in the U.S. have obligations to report financial assets held abroad. The FBAR (Foreign Bank Account Report) requires the completion of FinCEN Form 114 when the aggregate balance of all financial accounts outside the U.S. exceeds $10,000 at any time during the year. This obligation covers checking accounts, savings, investments, and even accounts where you only have signature authority, without being the owner.

The FATCA (Foreign Account Tax Compliance Act) requires the completion of Form 8938 when foreign financial assets exceed certain thresholds. For U.S. residents filing as single, the limit is $50,000 on the last day of the tax year or $75,000 at any time during the year. For couples filing jointly, the amounts rise to $100,000 and $150,000, respectively. Americans residing abroad have significantly higher thresholds: $200,000 at year-end or $300,000 at any time for individual filing.

Penalties for failing to comply with FBAR are severe. In 2026, penalties for unintentional violations reach $16,536 per account, per year. Intentional violations can result in penalties of $165,353 or 50% of the account balance (whichever is greater), as well as possible criminal prosecution with fines up to $500,000 and up to 10 years in prison. The FBAR filing deadline is April 15, with an automatic extension until October 15.

Filing Deadlines

The standard deadline for filing income tax returns in the U.S. is April 15 of the year following the tax year. For American citizens and residents who live and work outside the United States, the IRS grants an automatic two-month extension, moving the deadline to June 15. If necessary, any taxpayer can request an additional extension until October 15 using Form 4868.

A critical point many immigrants are unaware of: the extension to file is not an extension to pay. If you owe taxes to the U.S. government, payment is still required by April 15, even if the return is filed later. Late payments generate automatic interest and penalties, regardless of extensions granted for filing the form.

Navigating the American tax system requires specialized technical knowledge, particularly for those who maintain financial ties with Brazil. Hiring an accountant (CPA) with experience in international taxation is not a luxury, but a practical necessity. Errors in filing or reporting foreign assets can result in significant financial penalties and, in severe cases, complications that may even affect the immigration process in the United States.

Victoria Harper

Editor-in-Chief

Meet the author

Leading journalism and editorial content at Visto n’ Visa, Victoria helps make immigration topics clear, trustworthy, and easy to understand. Her focus is on delivering useful, human, and relevant content for people exploring new paths abroad.