US Tax Filing 2025: A Detailed and Accurate Guide for Vietnamese Individuals (F-1, H-1B, Green Card)

Understanding and complying with the US tax system is mandatory for anyone earning income in the United States, especially the Vietnamese community, which encompasses various immigration statuses (F-1, H-1B, Green Card, investors, etc.). Filing US taxes is not only a legal obligation but also directly impacts your finances (refunds, tax credits) and long-term immigration record. This article provides the most up-to-date, step-by-step roadmap to personal income tax filing for the 2024 tax year (to be filed in 2025), focusing on critical points for Vietnamese taxpayers.

Why You Must Pay Attention to US Tax Filing

• Legal Obligation: Most individuals with US income must file and pay income taxes at the federal level (IRS), state level, and sometimes local level. US citizens and lawful permanent residents (Green Card holders) must report worldwide income, regardless of residence.
• Financial Opportunities: Filing allows you to recover over-withheld taxes (tax refund) and claim valuable tax credits (tax credits), significantly reducing your tax liability or even resulting in a refund.
• Immigration Benefits: A history of tax compliance is a major plus in immigration procedures like visa renewals, Green Card applications, or naturalization. Immigration authorities often review your tax history.

Serious Consequences of Non-Compliance

• Penalties and Interest: The IRS can impose severe penalties for failure-to-file and failure-to-pay, plus interest on unpaid taxes.
• Loss of Benefits: You may forfeit legitimate deductions and credits. Nonresident aliens filing late may lose these benefits entirely.
• Immigration Record Impact: Non-compliance can jeopardize visa renewals, Green Card applications, or naturalization. IRS and immigration agencies share information.
• Criminal Prosecution: In cases of willful tax evasion, individuals may face investigation and prosecution.

Who Needs to File US Taxes?

Your filing requirements, form choice, taxable income, and tax benefits depend on your tax residency status, which is not always the same as your immigration status. Two main categories exist:

1. Resident Alien (RA) for Tax Purposes

• Taxed on worldwide income (like US citizens).
• Eligible for the Standard Deduction and most tax credits.
• Uses Form 1040.
• Determined by:
  • Green Card Test: If you hold a Green Card, you are an RA.
  • Substantial Presence Test (SPT): You are present in the US at least 31 days during the current year and a weighted total of 183 days over the three years (100% of days in the current year + 1/3 of days in the previous year + 1/6 of days in the year before that).

2. Nonresident Alien (NRA) for Tax Purposes

• Taxed only on US-source income.
• Not eligible for the Standard Deduction (with rare treaty exceptions).
• Eligible for fewer tax credits.
• Uses Form 1040-NR.
• Applies if you do not meet the Green Card Test or SPT.

Important Note on Exempt Individuals & Form 8843:

• Exempt Individuals (F, J, M, Q visa holders) do not count days toward the SPT for a limited period (generally five calendar years for F/M; two out of the last six years for J/Q non-students).
• They must file Form 8843 annually, regardless of income, to declare exempt status. Failure to file may result in counting exempt days toward the SPT, eventually making them RAs.

Quick Comparison Table: RA vs. NRA for U.S. Tax Filing

Minimum Income Thresholds for Filing

Not everyone with a US income must file. Filing requirements depend on your gross income, filing status, and age. The IRS publishes these thresholds annually (e.g., for tax year 2024: $14,600 for single filers under 65).

Even if below the threshold, consider filing if:

• You had taxes withheld and want a refund.
• You qualify for refundable credits (e.g., EITC, Child Tax Credit).
• NRAs with US business income or US source income file Form 1040-NR to claim a refund or deductions.

Filing Requirements by Visa/Immigration Status

• Green Card Holders: Always RA – file Form 1040 on worldwide income.
• H-1B Visa: Usually meet SPT quickly – file Form 1040 as RA. Subject to Social Security & Medicare withholding (subject to totalization treaties).
• F-1/J-1 Students & Exchange Visitors: Typically NRA during exempt period – file Form 8843 and, if you have US-source income, Form 1040-NR. CPT/OPT wages are ECI (progressive tax); scholarships/grants may be taxed at 14% or 30%. Exempt from Social Security & Medicare initially. After the exemption, you may become an RA.
• Investors: If Green Card, RA on worldwide income; if NRA, file Form 1040-NR on US investment income.
• Vietnam-based Individuals with US-source income (FDAP): Often subject to 30% withholding at source. May file Form 1040-NR to claim over-withheld amounts or deductions.

Essential Documentation for Tax Filing

SSN vs. ITIN

• SSN (Social Security Number): 9-digit number from SSA; for US citizens, Green Card holders, and those authorized to work. Used for employment, tax reporting, and social benefits.
• ITIN (Individual Taxpayer Identification Number): 9-digit number beginning with ‘9’ from the IRS; for those with US tax filing obligations but ineligible for SSN. Does not authorize work or social benefits; not eligible for EITC.
• Applying for an ITIN: File Form W-7 with your tax return and certified identity documents. ITINs expire after three years of non-use.

Income Reporting Forms

• Form W-2: Wage and withholding information from employers.
• 1099 Series: NEC (independent contractor income), MISC (miscellaneous income), INT (interest), DIV (dividends), R (pension/retirement distributions), G (government payments).
• Form 1042-S: Reports US-source income to NRAs (scholarships, grants, royalties). Essential for NRAs.
• Form 8288-A: FIRPTA withholding on US real estate sales by NRAs.
• Other Reports: Schedule K-1 (partnerships, S-corporations, trusts), cryptocurrency gains, etc.

Personal and Dependent Information

Gather full names, birthdates, addresses, and SSN/ITINs for yourself, spouse (if filing jointly), and dependents. Provide US bank account details for direct deposit of refunds.

Receipts for Itemized Deductions

• RAs: May choose Standard Deduction or Itemized Deductions if qualified expenses exceed the standard amount.
• NRAs: No Standard Deduction; itemize specific ECI-related expenses on Schedule A of Form 1040-NR (state/local taxes, charitable contributions to US organizations, etc.). Keep receipts for medical expenses (above AGI threshold), mortgage interest, charitable donations, and casualty losses.

Federal U.S. Tax Filing Process

Choose Your Filing Status

• NRA (Nonresident Alien): Usually files as Single or Married Filing Separately (MFS). In rare cases, you may qualify as a Qualifying Surviving Spouse (QSS). Cannot file Married Filing Jointly (MFJ) unless electing to be treated as a Resident Alien.
• RA (Resident Alien): Same options as U.S. citizens: Single, MFJ, MFS, Head of Household (HOH), or QSS.
• Special Option: An NRA married to a U.S. citizen or RA may elect to be treated as an RA to file jointly (MFJ) using Form 1040, but this means global income will be taxed. This decision should be considered carefully.

Choose the Correct Tax Form

• Form 1040: For U.S. citizens and Resident Aliens (RA).
• Form 1040-NR: For Nonresident Aliens (NRA).
• Form 8843: Mandatory for “Exempt Individuals” (such as F, J, M, Q visa holders) to exclude days of presence from the Substantial Presence Test (SPT). Must be filed even if no 1040-NR is required.

Report Taxable Income

• RA (Form 1040): Must report worldwide income. May claim Foreign Tax Credit (FTC  –  Form 1116) or Foreign Earned Income Exclusion (FEIE  –  Form 2555) if eligible, to avoid double taxation.
• NRA (Form 1040-NR): Only reports U.S.-sourced income, divided into two types:
  • Effectively Connected Income (ECI): Income from business/services in the U.S. (e.g., wages, self-employment). Allows for deduction of related expenses and is taxed at graduated rates. Reported on Page 1 of Form 1040-NR.
  • Fixed, Determinable, Annual, or Periodical (FDAP): Passive U.S.-sourced income (e.g., interest, dividends, royalties, rental income). Usually not eligible for deductions. Subject to a flat 30% tax (or lower per treaty  –  no effective U.S.-Vietnam tax treaty currently). Tax is typically withheld at source. Reported on Schedule NEC (Form 1040-NR).
  • Note: Distinguishing between ECI and FDAP is critical. For example, rental income is typically FDAP (30% tax on gross), but an NRA may elect to treat it as ECI to deduct expenses and pay tax on net income, only if Form 1040-NR is filed on time.

Apply Deductions and Tax Credits

• Deductions:
  • RA: Can choose Standard Deduction (simpler) or Itemized Deductions (if qualifying expenses exceed the standard).
  • NRA: Not eligible for Standard Deduction. May only claim Itemized Deductions related to ECI (e.g., state/local taxes on ECI, U.S. charitable contributions). Use Schedule A (Form 1040-NR). May also qualify for certain Adjustments to Income (e.g., IRA, HSA).
• Tax Credits (direct reduction of tax owed):
  • RA: May qualify for a wide range of credits: Child Tax Credit, Credit for Other Dependents, EITC, Child Care Credit, Education Credits, etc.
  • NRA: Only limited credits available, usually tied to ECI.
    • Child Tax Credit / Credit for Other Dependents (only if the dependent is a U.S. citizen/resident or resident of Canada/Mexico; if the dependent only has an ITIN, only eligible for the $500 Credit for Other Dependents).
    • Child Care Credit may also be available.
    • Not eligible for EITC or Education Credits.

Estimated 2024 Federal Tax Brackets (For Reference) (Tax brackets apply to taxable income after deductions. Check IRS.gov for official figures.)

(MFS brackets are generally similar to Single for lower income levels)

See also:

• Federal Income Tax Brackets for 2024 and 2023

• 8 Types of Taxes in the US That Vietnamese Immigrants Need to Know

Calculate Final Tax Due or Refund

• Calculate estimated tax based on taxable income and tax brackets.
• Subtract any qualifying tax credits to get the total final tax liability.
• Compare total tax owed with taxes already withheld or paid (via W-2, 1099, 1042-S, estimated tax payments).
  • If taxes paid > tax owed → Refund Due
  • If taxes paid < tax owed → Tax Payment Due by the deadline

Choose the Appropriate Filing Method

1. File Using Tax Software:
   • Pros: Widely used (e.g., TurboTax, H&R Block), step-by-step guidance, auto-calculations, error checks, quick e-filing. Many support both 1040 and 1040-NR.
   • Cons: Usually requires payment (especially for complex cases or state returns). Basic tax and English understanding required.
2. Use Free Filing Services:
   • IRS Free File: Free software via IRS.gov for those with AGI below tthe hreshold (e.g., $84,000 in 2024). Access through IRS link to ensure free use.
   • IRS Direct File: New free tool from the IRS; limited to certain states and simple returns.
   • VITA/TCE Programs: IRS-certified volunteers help eligible individuals (low/moderate income, seniors, people with disabilities). Find locations at IRS.gov.
   • GetYourRefund.org / MyFreeTaxes.com: Portals that connect users with free tax prep help.
   • Note: Free services are best for simple cases. Complex NRA situations or treaty-based filings may require other options.
3. Hire a Tax Professional:
   • Options: EA (Enrolled Agent), CPA (Certified Public Accountant), Tax Attorney, or PTIN-registered Tax Preparer.
   • Pros: Deep tax knowledge, accurate filings, tax optimization, saves time/stress. Highly recommended for complex situations (e.g., NRA, international investments, businesses).
   • Cons: Can be expensive. Choose someone experienced in international/expat taxation.
4. Mail Paper Return:
   • Pros: Option for those unfamiliar with digital filing.
   • Cons: Much slower processing than e-filing (weeks or months), higher chance of errors. Must be signed and mailed to the correct IRS address. Use Certified Mail for proof of delivery.

Key U.S. Tax Filing Deadlines

Tax Filing & Payment Deadlines:

• April 15: Main deadline for most individuals (U.S. Citizens, U.S. Residents, and Nonresident Aliens (NRA) with U.S. tax withholding).
• June 15: Deadline for NRAs without U.S. tax withholding and U.S. Citizens/Residents living and working abroad as of April 15.
• Note on holidays/weekends: If the deadline falls on a weekend or public holiday, it is extended to the next business day.

Filing Extension (Form 4868):

• Submit Form 4868 before the original deadline to receive a 6-month extension (until October 15).
• VERY IMPORTANT: Filing an extension DOES NOT extend your tax payment deadline. You must still estimate and pay your taxes by the original due date (April 15 or June 15) to avoid penalties and interest.

Estimated Tax Payments:

• If you earn income not subject to sufficient withholding (e.g., self-employment, interest, dividends), you may need to make quarterly estimated tax payments (usually on April 15, June 15, September 15, and January 15 of the following year).
• Residents use Form 1040-ES. Nonresident Aliens use Form 1040-ES (NR).
• Underpayment of estimated tax may result in penalties.

Don’t Forget State Tax Filing

• Most states have separate income tax systems independent from the federal government. (Some states with no income tax: FL, TX, WA, NV, WY, SD, AK, etc.)
• If you live or earn income in a state with income tax, you must file a separate state return.
• Rules (rates, deductions, credits, residency criteria, deadlines) vary significantly by state.
• To find more information: Visit your state’s tax authority website, use tax software (often includes an extra fee for state filing), or consult a tax professional.

Vietnam – U.S. Tax Treaty

• Status: Signed on July 7, 2015.
• MOST IMPORTANT: As of May 2025, the treaty has NOT entered into legal force due to incomplete ratification (notably by the U.S. Senate).
• Implications: All U.S. tax filing still follows domestic U.S. tax law. No reduced tax rates (e.g., the 30% withholding on FDAP income for Vietnamese NRAs still applies) or special treaty provisions are in effect. Do not trust unofficial sources claiming the treaty is in effect.
• Potential benefits (if ratified in the future): Reduced withholding on dividends, interest, royalties; clearer rules on permanent establishment; exemptions for students/professors; dispute resolution mechanisms – but these are only potential.

Common Mistakes in U.S. Tax Filing

• Incorrect Residency or Filing Status (RA/NRA): Major error impacting the entire return. Carefully review the Green Card Test, Substantial Presence Test (SPT), and the exemptions.
• Missing or Misreporting Income (ECI/FDAP): All taxable income must be reported. Properly distinguish between ECI and FDAP for NRAs.
• Invalid Deductions or Credits: NRAs are not eligible for the standard deduction. Review requirements for other deductions/credits (NRAs are often heavily restricted).
• Late Filing or Payment: Leads to penalties and interest. Remember, extensions are for filing only – not payment.
• Incorrect Personal Information (Name, SSN/ITIN): May delay processing and refunds.
• Inadequate Recordkeeping: Keep copies of your returns and supporting documents for at least 3 years. Essential for IRS audits or amendments.

Where to Find Help with U.S. Taxes

• IRS website (irs.gov): The official and most comprehensive source (publications, forms, instructions, tools, multilingual info – including Vietnamese).
• Key IRS Publications: Pub 519 (Tax Guide for Aliens), Pub 901 (Tax Treaties), Pub 515 (Withholding of Tax on NRAs).
• Free programs: IRS Free File, IRS Direct File, VITA/TCE, GetYourRefund.org, MyFreeTaxes.com (for eligible users).
• Tax Professionals: EA (Enrolled Agent), CPA, or Tax Attorney – especially for complex or international tax situations.
• Community organizations/trusted sources: USAHello, immigrant support groups. Always verify with the IRS.

FAQs

1. I only have income from Vietnam. Do I need to file U.S. taxes?

• If you are a U.S. Citizen or Green Card Holder: YES, you must report your worldwide income (including Vietnamese income) on Form 1040, regardless of where you live. You may be eligible for the Foreign Tax Credit (FTC) to avoid double taxation.
• If you are a Nonresident Alien (NRA) for U.S. tax purposes: USUALLY NO, if you have no U.S.-sourced income. NRAs only need to file U.S. taxes for income from U.S. sources.

2. What are the consequences of filing U.S. taxes late?

• Failure-to-File Penalty: 5% per month (up to 25% of unpaid taxes).
• Failure-to-Pay Penalty: 0.5% per month (up to 25%).
• Interest accrues on unpaid tax and penalties.
• Loss of deductions/credits, especially if an NRA files too late.
• Negative impact on immigration records.

3. Can I file U.S. taxes while living in Vietnam?

YES, you can:

• Use online tax software and e-file.
• Hire a professional tax service to handle it remotely.
• Mail paper forms to the IRS’s international address.

4. What’s the main difference between SSN and ITIN when filing U.S. taxes?

• SSN (Social Security Number): For those authorized to work in the U.S., used for employment, taxes, and Social Security benefits.
• ITIN (Individual Taxpayer Identification Number): For tax filing only, for those not eligible for an SSN. Does not authorize work or qualify for the Earned Income Tax Credit (EITC).

Conclusion

Filing U.S. taxes is a complex yet essential responsibility for many Vietnamese individuals who live in the U.S. or have financial ties to the country. Understanding your tax residency status (RA/NRA), gathering proper documentation (SSN/ITIN, income forms), selecting the correct forms, meeting deadlines, and knowing the difference between federal and state taxes are all critical steps. Note that the Vietnam – U.S. Tax Treaty is not yet in effect as of May 2025.

Don’t hesitate to seek help from reliable sources such as IRS.gov, free tax assistance programs, or experienced tax professionals. Filing your U.S. taxes correctly not only keeps you legally compliant but also optimizes your finances and helps build a secure foundation for your future in the U.S.