Thousands of newly arrived Ukrainians in the US have until April 18 to submit their tax returns. Some may benefit from this

Most US citizens have until April 18th to file their tax returns and pay their taxes. Ukrainians who came to the US in 2022 or earlier should file income tax returns, even if they were below the minimum tax rate, experts told Voice of America in a comment and explained why this is important and can be financially beneficial.

As Voice of America previously reported, this may be relevant for thousands of Ukrainians, because more than 118,000 people from Ukraine came to the United States under the United for Ukraine program alone.

Tax season as “reward time”

All US residents (with the exception of certain foreign diplomats) must pay taxes for 2022 if their income exceeds $12,950 to $28,700, depending on age and marital status. People with self-employment income are required to report their income and file taxes if they earn at least $400 in a year.

Usually, from each payment to an employee, throughout the year, part of the funds is deducted for tax. However, the level of these payments is often chosen by the employer and the employee himself. When submitting a tax return from January to mid-April of the following year, taxes paid are calculated. After that, the taxpayer either has to pay back the amount of underpaid taxes to the government, or can get a refund if it turns out that he paid more than he should have during the year.

A significant proportion of Americans overpay taxes during the year and expect to receive a certain amount from the government back in April.

It is the anticipation of such payments from the state and federal governments that makes tax season “a time of unexpected rewards,” writes The New York Times. Others are anxiously waiting for this time, because they will have to pay extra to the state.

In order not to miss out on the opportunity to receive certain payments from the government, a licensed tax professional from California Oksana Doroshenko in the Voice of America commentary advised all new arrivals from Ukraine to declare income in any case, even if in 2022 it was lower than the limits established for taxation.

Often in the US, tax returns are submitted with the help of professional tax accountants, you can also use free or paid services to fill out the return yourself. At the same time, tax experts can suggest nuances that can legally optimize the tax amount, as well as increase the amount of the tax credit.

“No matter what your status is in the US, if you have a Social Security Number (SSN), the government expects you to pay taxes,” the vice president of finance at software company Arcules told VOA. Lyarisa Raifelpresident of the Ukrainian cultural center in Los Angeles.

The expert especially emphasizes the importance of timely tax reporting for emigrants who plan to stay in the United States. “I would say not to be afraid,” advises Larysa Raifel, “there are a lot of Ukrainians in America who have lived here for 10-15 years, you should just ask for help. The main thing is not to ignore [кінцевий термін подання податкової декларації, – ред.]”.

By the way, fines and penalties are provided for non-payment of taxes. In some cases of tax evasion, criminal proceedings are opened. For late payment or submission of inaccurate information, the tax service can freeze bank accounts or withdraw money from wages, – she said during a live broadcast on the Settle In for Ukrainians platform Maria Sigalasan expert of the International Rescue Committee.

Construction, “moving”, IT, vocals – Ukrainians earn money in various fields

Based on the experience of communicating with Ukrainians who came to the USA to escape the war, both experts name numerous areas where Ukrainians earned money last year. This includes physical work in construction, as well as work in caring for children and the elderly. Some of them got a job in highly qualified positions. Some of the new arrivals have already established their own businesses. According to Larysa Reifel, these are, for example, companies with freight transportation and assistance with relocation (so-called “moving”) or small companies with grass cutting and garden care services.

Oksana Doroshenko’s clients this year pay taxes on income received in the field of IT technologies, photography, and design. Many clients, says Doroshenko, found themselves in the creative field in Los Angeles – after arriving on the so-called “talent visas” (O1 type visas), they earn money in the music field.

“Ukrainians in California, with whom I spoke on the subject of taxation, almost all already know well how to submit declarations,” says Lyarysa Raifel. It shows respect for the country in which you live and work.”

Previously, the Voice of America already published the experience of self-filling the declaration.

Tax discounts on home insulation, electric cars and courses for teachers

Taxpayers can also take advantage of a tax credit for home improvement costs related to energy efficiency, or count on a tax credit of up to $7,500 for the purchase of new electric vehicles, etc.

For the first time this season, the tax credit that teachers can get in the US – from kindergarten to 12th grade teachers – has increased. They will be able to receive reimbursement for previously unreimbursed expenses such as books, equipment, and courses related to their work.

Alleviating “tax stress”: the chances of an audit are less than half a percent

In the season of “tax deadlines”, local publications collect expert advice on how to cope with stress and anxiety. So, The New York Times, quoting experts, advises how to resist emotions related to money. Because, according to a survey by the American Psychological Association, 65% of Americans consider money to be the main source of stress.

According to the publication, among Americans, the fear of checking submitted declarations is quite widespread. “For reassurance,” the NYT cites a Syracuse University study that puts the odds of being audited at only about 0.38%.

According to the study, in fiscal year 2022, the probability that an IRS agent would audit a millionaire was only 1.1%. As a result, barely more than one in every 100 millionaires was audited (in total, more than 165 million tax returns were filed in the US last year).

Instead of in-person audits, the US tax system increasingly relies on highly automated processes for mailed or online returns (“in-person audits”). Sometimes declarants receive a request to provide additional information for certain items.

Analysts at Syracuse University also estimated that the IRS “audits the poorest families five times more often than everyone else.”

Experts interviewed by the Voice of America urge not to delay and submit tax returns on time.

Tax returns in the US this year must be submitted by April 18, but for regions where devastating natural disasters have occurred, the deadline has been extended to October 16. This date covers most of California, parts of Alabama and Georgia. Some taxpayers may also request to postpone reporting, for example, until May 15. This year, about 20 million people may apply for an extension of the declaration deadline, the tax office expects, according to the NYT publication.

The publication also quotes advice for families from Megan McCoy, associate professor of personal financial planning at Kansas State University. To avoid conflicts based on finances in the couple’s personal life, the scientist suggests partners share detailed “money stories” and answer the following questions in turn:

• who paid the bills in your family?
• what early memory about money makes you most ashamed and proudest?
• what did your parents do with money that you would never do yourself?

Ukrainian deadlines for foreign income of immigrants

Ukrainians who fled the war and, having stopped in one of the countries, earned money there and/or received financial assistance, should keep in mind the provisions of the Tax Code of Ukraine on foreign income. Thus, the representative of the Committee of the Verkhovna Rada of Ukraine on Finance, Tax and Customs Policy, Nina Yuzhanina, recently reminded in Telegram that “regardless of the war, Ukrainian refugees need to declare their income.”

The declaration must be submitted by May 1, 2023, – informs Yuzhanina, – according to the established form together with the attachments.

After that, up to and including August 1, tax obligations must be paid.

At the same time, aid received from foreign countries and companies should be indicated as foreign income, but income tax and military levy are not paid on such amounts, – says Yuzhanina.

Instead, other incomes, except aid received abroad, will be taxed in Ukraine at a rate of 18% and a military levy of 1.5% in addition.

According to the UN, more than 5 million Ukrainians have applied for temporary shelter in Europe. As a reminder, 72 international bilateral conventions on the avoidance of double taxation (including with the USA) are in force between Ukraine and other countries.

Citizens of Ukraine who are just looking for a job in the USA or, for example, have been denied employment due to citizenship or immigration status, are advised to familiarize themselves with the official information on preventing all types of discrimination against Ukrainians in the USA.