Big problems on the horizon for Michigan undocumented workers, filing tax returns and obtaining Citizenshiip

The requirements for filing tax returns can be complicated, but basically, if you earn money in the United States, you are required to file a tax return.

And on the same token, in order to become a US Citizen, you must be current in filing tax returns

So if you are a in the US unlawfully, and working, you are required to file a tax return and pay income taxes.

The worker files a tax return and applies for an ITIN number.

The IRS issues ITIN numbers regardless of your status as becoming a US Citizen.

For Michigan workers, this has been relatively simple.

Until recently.

In order to apply for a ITIN number, you need to some form of valid identification.

Michigan used to issue Identification Cards without proof of US Citizenship.

Michigan now does not issue Identification cards without proof of lawful presence here in the US
MCL 28.291

Those identification cards that Michigan used to issue are set to expire, and undocumented workers will be unable to renew them.

Michigan undocumented workers who may wish to take advantage of some of the new immigration reforms will not be able to get an Identification card from Michigan, thus they will not be able to get an ITIN number, and not be able to file a tax return.

Stay tuned, there may be a need for some kind of amnesty type of program.

How to file a tax return if you do not have a Social Security Number - Simplified

Here is the bare basic information for filing a tax return and applying for an ITIN

You need to complete your tax return as if you have your identification numbers, leaving the identification numbers blank

Include a completed form W-7

You need to include an official identification document when you submit your return.

Examples of official identification are found at:

http://www.uscis.gov/i-9-central/acceptable-documents/list-documents

The tax return is completed and submitted to the IRS in Austin

Your original identification documents will be returned to you.

Doug Zandstra CPA EA
http://www.dougzandstra.com/

Questions?

Health Savings Account Basics

HSA Accounts Simplified 

If you have to pay a lot of out of pocket medical expenses, chances are you have what is called a High Deductible Medical Insurance Plan.

These are becoming popular with employers because they are far cheaper than comprehensive insurance policies.  These are especially attractive for small businesses who simply can't afford comprehensive insurance for employees.

The burden of the cost of the insurance, and the additional medical costs shifts to the employees.

One way for the individual to help with the additional cost of health insurance, and medical expenses is to get a health savings account or HSA

A health savings account is basically a checking account that is used for health related expenses.

Money that is deposited into your health savings account is tax deductible.

Money that is spent from your account is intended to be used for medical related purposes.  If you spend money from your HSA for non-medical related expenses, you are penalized on those expenditures.

You will receive annual statements for your tax returns that show the amounts that you deposited and spent from  your account.

Banks have different requirements for minimum balances etc...

As the name implies, "Savings Account" this is a savings account.  This is your money treated like a savings or checking account.

Basic Rules

There are some rules for HSA accounts.

HSA's are only for those who have "High Deductible" health insurance.  For 2015 a high deductible insurance plan is defined as having a deductible $1,300 or $2,600 depending on single coverage or family coverage.

For IRS purposes, you have to keep your medical receipts for expenditures from your HSA accounts as supporting documentation.

There are limits as to how much you can deposit into your HSA account.  This depends on who is covered, you or your family, and the amounts are $3,350 or $6,650 for 2015

Nuts and Bolts

Ask about getting a debit card for your HSA account. This will make it easier for you to pay for medical expenses such as prescriptions at pharmacies.

Ask your bank about the minimum balance requirements and keep the minimum in the account.  When you get a medical bill, write the check from your HSA, then write a check for the same amount from your checking account and put it into your HSA account.  The deposit into your HSA is tax deductible  

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