As a green card holder, you are a tax resident and are taxed on your worldwide income from the date you get your green card, under the same tax laws as US citizens. You must report all income, use all applicable deductions and credits, and meet federal and state tax obligations. Knowing these requirements is key to keeping your status and avoiding penalties. This article will cover the main tax filing requirements for green card holders. Additionally, maintaining relationships with a foreign country can be significant for tax benefits and residency qualifications.

WHAT ARE THE TAX FILING REQUIREMENTS FOR GREEN CARD HOLDERS?

FILING IRS FORM 1040 AS A US RESIDENT
Green card holders must file IRS Form 1040 as US residents. This form is used to report annual income and calculate the amount of federal income tax owed or refund due.

STANDARD FILING THRESHOLDS
The filing thresholds for green card holders depend on their filing status and age. For 2023:

Single: $13,850 (under 65), $15,700 (65 or older)
Married Filing Jointly: $27,700 (both under 65), $29,650 (one spouse 65 or older), $31,500 (both 65 or older)
Head of Household: $20,800 (under 65), $22,650 (65 or older)
Self-Employed: Must file if net earnings are $400 or more

Even if income is below these thresholds, green card holders must file if self-employed and earn $400 or more annually.

HOW DOES FILING STATUS AFFECT TAX FILING REQUIREMENTS FOR GREEN CARD HOLDERS?
For green card holders, selecting the correct filing status is crucial as it directly impacts your tax rates and filing requirements. Here’s a breakdown of the main filing statuses:
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For the summer Olympics of 2016, I wrote an article on what a State Tax Decathlon could look like. Here are the events:

The Jock Tax Challenge – calculate state taxes for professional athlete
Multistate File and Plan for individual with activities in 10 states
The Business Split – calculate state taxes for multistate business in states with differing sourcing and apportionment
Nexus Confidence – based on given facts, does taxpayer have nexus in the state?
Amicus Drafting – research and draft brief with references to at least 30 cases
Power of the People – draft ballot materials for a state tax initiative
Harmony – draft federal legislation acceptable to all stakeholders
Dust It Off – persuade a state legislature to hold hearing and take action on a report of a state tax commission
Base Broadening – make convincing arguments on why a state tax incentive for business should be repealed
Tax Literacy – design education plan for high school students to understand their state’s tax system and compliance obligations

For more details, see “The State Tax Decathlon,” Tax Notes State, 9/12/16 (with some background on the decathlon too).

For the summer Olympics of 2020, I wrote about “The State Tax Pentathlon,” Tax Notes State, 8/16/21 (the 2020 Olympics were postponed to 2021 due to Covid). One of the tax events: Speed Answering — Like the horse riding and jumping event where athletes do not know the horse they will be assigned, contestants must answer questions from the taxpayer and practitioner phone lines of any 12 randomly selected state tax agencies. Points are awarded for accuracy, clarity, and politeness.

I’m not writing about the 2024 Olympics due to time constraints, BUT, what would you suggest to update my decathlon list form 2016?

Professor Annette Nellen Requests Your Ideas For The 2024 Olympics

According to the California Legislative Analyst Office, California is raising billions of dollars with state tax increases while limiting the use of NOLs.

The May Revision proposes to temporarily increase corporation tax revenues by limiting the use of business tax credits and net operating loss deductions. We think the proposal to limit use of tax credits is worth serious consideration. On the other hand, the proposal to limit net operating loss deductions raises concerns. In response, we suggest the Legislature consider alternative ways to raise revenue should it wish to pursue revenue solutions.

Background
Business Tax Credits Aim to Encourage Certain Economic Activity. Tax credits allow businesses to reduce their tax bill when they do certain activities—such as hiring certain workers and conducting research—that state policies aim to encourage. Business tax credits essentially are spending programs carried out through the state’s tax system. Examples include the research and development credit, the California Competes credit, and the film and television credit. The research and development credit is the state’s single largest business credit, reducing revenue by around $2 billion each year.

Net Operating Loss Deductions Smooth Business Profits and Losses Over Time. Many businesses experience losses in some years. These businesses are allowed to carry forward these net operating losses (NOL) and deduct them from their taxable income in future years. NOL deductions allow businesses to smooth profits and losses over time for tax purposes. NOL deductions can be carried forward for up to 20 years.

NOL Deductions Provide More Equitable Treatment of Taxpayers. The smoothing of profits and losses via NOL deductions results in businesses with similar profits over time paying similar taxes. Without this smoothing, businesses that have large swings in profits and losses from year to year pay more taxes than businesses with similar but more stable profits. Some businesses are more prone to large swings because they are in riskier or more innovative industries. For example, profits of businesses in the technology, motion picture, transportation, and real estate sectors tend to fluctuate more than other sectors. NOL deductions allow for a more equitable treatment of these types of businesses.
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“The liberal justices of the California Supreme Court sided with California’s corrupt politicians to strip citizens of the initiative rights that they have had for over 112 years.” – Carl DeMaio
The California Supreme Court sided with Gavin Newsom and California Democrat politicians in removing the California Taxpayer Protection Initiative from the November ballot.

The California Taxpayer Protection Initiative (CTPI) is a citizens initiative that collected the required amount of valid signatures — over 1.4 million — from Californians to be placed on the ballot. The measure would make it harder for state and local politicians to impose costly and unfair tax hikes — the reason that politicians sued to block it from the ballot.

Specificialy, the California Taxpayer Protection Initiative would:

-Restore a two-thirds vote for any tax hike – thus ending the way they imposed the car and gas takes hikes recently
-Impose a stricter definition on what is a “tax” so politicians can’t call them “fees”
-Require the words “tax increase” be included on the official title of any measure that appears on the ballot that contains a tax hike inside of it, and
-Repeal dozens of tax hikes imposed after Jan 1, 2022 – immediately saving taxpayers money Carl DeMaio, a candidate for State Assembly and chairman of the tax-fighting group Reform California — which helped collect signatures to place the initiative on the ballot, says that the decision stripped citizens initiative rights.

“The liberal justices of the California Supreme Court sided with California’s corrupt politicians to strip citizens of the initiative rights that they have had for over 112 years,” said Demaio. “By removing the California Taxpayer Protection Initiative from the November ballot, the Sacramento Swamp has shown how far they will go in their abuse of power to silence their opposition and prevent reform from happening.”
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