The US is still considered a land of opportunities and thousands of immigrants flock to the country each year, from all over the world, especially from India. The coveted Green Card opens the door to myriad opportunities but introduces stringent and sometimes onerous tax obligations like income tax and estate tax. Pre-immigration tax planning and estate planning could enhance tax liabilities and optimise options before triggering tax obligations. But it is important to remember that some tax-saving steps can be availed of before you become a permanent resident of the US officially.
When you apply for an immigration visa at a US embassy, you are usually issued an immigrant visa that is valid for six months. But if your medical reports expire within six months from the date of your immigrant visa interview, your visa will be issued for a shorter duration. You, as an immigrant visa holder, must travel to the US and enter the country before the immigrant visa expires. Notably, a visa is a document that allows you to travel to the US and you need to present the same to the Customs and Border Patrol (CBP) to enter the country.
If CBP finds you eligible for admission, you will be considered as a lawful permanent resident or green cardholder. Instead of issuing a ‘green card’ at the port of entry, you will get a stamp in your passport, which is valid for work authorisation, permanent stay and travel. This stamp is valid for a year from the date of admission.
It is important for you to note that the day you become a lawful permanent resident, the very same day is counted for tax purposes. All your tax obligations begin on this day. If you have applied for lawful permanent resident status or a green card from within the US, it is necessary to file an Adjustable of Status (AOS) application on Form I-485. These are issued a permanent resident card (Form I0551) if the application is approved.
Pre-immigration tax planning is imperative to reduce the impact of US taxes on your global income, foreign assets, financial accounts, and investments. Once you are settled in the US, ensure setting up your residency and procuring your green card and keep track of your foreign financial assets.
