Prepare for 2026 Tax Season: Key Updates and Tips

(WASHINGTON, D.C.) — If you earned U.S.-taxable income in tax year 2026 (returns filed in 2027), your first job is to confirm your U.S. tax residency status and file the correct return on time.

for immigrants and visa holders, that single step drives everything else. It determines whether you report U.S.-source income only or your worldwide income, and which deductions and credits you may claim.

The IRS’s starting point is Publication 519, U.S. Tax Guide for Aliens (PDF at irs.gov/pub/irs-pdf/p519.pdf).

This filing guide also covers three developments to plan for early: the IRS “Get Ready” push, the IRS Individual Online Account as a 24/7 tool, and the ongoing move away from paper tax refund checks.

1) Get ready now: IRS prep steps, online account access, and filing options

the irs urges taxpayers to “Get Ready” before filing season opens. That advice matters even more for households with mixed immigration statuses, foreign income, or cross-border accounts.

Start with two practical moves:

• Use the IRS Get Ready resources on irs.gov for checklists and filing options.
• Create or sign in to your IRS Individual Online Account at irs.gov/account.

Your online account can help you:

• View your filing history and key account details.
• Make payments and set up payment plans.
• Manage IRS notices and communication preferences.
• Help protect your tax data with identity verification steps.

For filing, most individuals will use:

• Form 1040 (U.S. Individual Income Tax Return), or
• Form 1040-NR (U.S. Nonresident Alien Income Tax Return) for nonresidents and many dual-status situations.

The IRS also offers Free File for eligible taxpayers through irs.gov during filing season. Free File typically pairs guided software for simpler returns with fillable forms for others.

📅 Deadline Alert: For tax year 2026 (filed in 2027), the standard filing deadline is usually April 15, 2027. If April 15 falls on a weekend or holiday, the deadline moves to the next business day. Confirm each year’s date on irs.gov/newsroom.

2) Refunds are going electronic: plan for fewer paper checks

A major operational change is the federal push toward electronic payments. The IRS has been encouraging taxpayers to stop relying on paper tax refund checks, which carry higher risks of delay, loss, or theft.

What to do now:

• Set up direct deposit for refunds. Use a U.S. bank account when possible.
• If you do not have a bank account, ask about account options at a bank or credit union.
• Some taxpayers use prepaid debit products or digital wallet options offered by providers. Fees and access vary.

If you expect a refund, direct deposit also helps avoid problems caused by address changes. Address mismatches are common for recent movers and new arrivals.

3) Big picture tax changes affecting 2026 returns (filed in 2027)

Tax rules change often, and new legislation can add schedules, documentation, and eligibility rules. For immigrants, the most common pitfall is assuming a credit is available when an identification number is missing or issued late.

A key eligibility rule to watch: for certain dependent-related benefits, the IRS may require that the taxpayer (and spouse on a joint return) have a valid SSN or ITIN issued by the return’s due date, including extensions.

Confirm year-specific rules and impacted credits in the Form 1040 instructions and IRS guidance.

Also watch for new schedules. New deductions sometimes appear on a dedicated schedule attached to Form 1040. If a deduction applies to wages or vehicle financing, keep payroll records and loan statements.

Parents should also watch for new child-related savings or credit programs tied to a child’s SSN and citizenship rules. Eligibility details can be strict.

When in doubt, confirm requirements in official IRS instructions.

4) Online income and digital assets: what immigrants and visa holders must report

Two compliance areas are producing more IRS matching notices: payment app income and digital asset transactions.

Payment apps, gig work, and online sales

All income is taxable unless a specific exception applies. That includes gig platform income, side jobs paid via payment apps, and sales of goods or services online.

You may receive Form 1099-K (Payment Card and Third Party Network Transactions) from payment apps or marketplaces. Keep in mind:

• Even if you do not receive a form, the income can still be taxable.
• Some payments are not income (example: reimbursed shared expenses). Keep records.

You generally report business or gig activity on:

• Schedule C (Form 1040) for self-employment income and expenses, and
• Schedule SE (Form 1040) to calculate self-employment tax, when required.

Digital assets (crypto, stablecoins, NFTs)

The Form 1040 includes a digital asset question. Answer it accurately. If you sold, exchanged, or received digital assets, you may need:

• Form 8949 and Schedule D (Form 1040) for capital gains and losses.
• Ordinary income reporting if you were paid in digital assets for work.

Brokers may issue Form 1099-DA for certain digital asset transactions. Match what you report to the forms you receive.

⚠️ Warning: Digital asset activity often creates taxable events even without cash. Trading one token for another can be a reportable transaction.

For IRS guidance, start at irs.gov/individuals/international-taxpayers and the IRS digital assets topic pages on irs.gov.

5) Immigration + taxes in 2026: where timing and documentation matter

Tax filing affects immigration processes in real ways. Two recurring pressure points are refund/payment methods and proof of income.

USCIS filings increasingly require electronic payment methods

USCIS has moved away from paper checks and money orders for many filings. That mirrors the broader federal move away from paper payments.

If you file immigration applications, keep a separate checklist for:

• Correct filing fees.
• Electronic payment methods accepted for your form type.
• Copies of confirmations and receipts.

Affidavit of Support (Form I-864): tax transcripts matter

If you sponsor a family member, USCIS often requests proof of income. Sponsors commonly submit IRS tax return transcripts, and W-2s and recent pay statements.

Tax transcripts can be pulled from the IRS Individual Online Account or requested through IRS channels. Using transcripts reduces disputes about what was filed.

A practical note for 2026: if new deductions reduce “total income” on your return, that can affect how your I-864 package reads. Some sponsors include an explanation and supporting pay evidence.

H-1B and other work visas: residency and FICA basics

Most H-1B workers become U.S. tax residents quickly under the Substantial Presence Test in Publication 519. Once you are a resident alien for tax, you report worldwide income and may have foreign reporting duties.

Also remember:

• F-1 and J-1 students and scholars can be exempt from the Substantial Presence Test for a period, depending on their category. See Publication 519.
• FICA taxes (Social Security and Medicare) depend on status and whether you are a resident for FICA rules. Many F-1 students in authorized practical training remain FICA-exempt for a period. H-1B workers are generally subject to FICA like other employees.

Eligibility: who needs to file for tax year 2026 (filed in 2027)

The IRS sets filing requirements by income, filing status, age, and dependency status. For immigrants, add one more filter: resident vs. nonresident status.

Use this checklist before you pick forms.

For residency rules and dual-status mechanics, see IRS Publication 519 and the Form 1040-NR instructions.

Step-by-step: how to file your 2026 federal return (filed in 2027)

Step 1: Confirm your U.S. tax residency status

Use the Green Card Test and Substantial Presence Test in Publication 519.

If you are claiming a treaty position, review Publication 901 (U.S. Tax Treaties) and any required disclosure forms.

Step 2: Choose the right return type

• Resident alien: File Form 1040.
• Nonresident alien: File Form 1040-NR.
• Dual-status: Often requires a dual-status return package. Publication 519 explains formatting and restrictions.

Step 3: Gather income forms and report all taxable income

Common documents include W-2s, 1099s, and other statements showing income.

• Form W-2 (wages).
• Form 1099-NEC (independent contractor income).
• Form 1099-K (payment app/marketplace payments).
• Form 1099-INT/DIV/B (interest, dividends, brokerage).
• Form 1099-DA (digital asset broker reporting), if issued.

Report business income on Schedule C when you are self-employed.

Step 4: Claim deductions and credits you qualify for

Attach any required schedules. If new deductions apply, follow the Form 1040 instructions closely and keep supporting records.

Step 5: Handle foreign reporting if you are a U.S. tax resident

If you are a resident alien for tax, you may need:

• FBAR (FinCEN Form 114) if foreign accounts exceed $10,000 in aggregate at any time during the year.
• Form 8938 (FATCA) if foreign assets exceed thresholds.

FATCA thresholds depend on filing status and residency. The IRS explains them in Form 8938 instructions.

Step 6: Set up refund delivery and pay any balance due

Choose direct deposit to avoid delays and reduce theft risk. If you owe, pay electronically through IRS options listed at irs.gov.

Your IRS online account can help.

Step 7: File electronically when possible, and keep proof

E-filing reduces errors and speeds processing. Save the accepted e-file confirmation and a PDF copy of the full return and schedules.

Also keep records supporting residency, income, and deductions.

Documents you’ll need (immigrant-focused checklist)

Identity and status

• SSN or ITIN documentation.
• Passport photo page and U.S. entry records, if relevant to residency days.
• Visa type history and status change dates.

Income

• W-2, 1099s, pay statements.
• Gig platform summaries and expense receipts.
• Digital asset transaction history and cost basis records.

Deductions and credits

• Education forms (Form 1098-T), if applicable.
• Child and dependent records, including SSNs and custody details.

Foreign reporting (if a U.S. tax resident)

• Highest balances for each foreign account for FBAR.
• Year-end values for specified foreign financial assets for Form 8938.

Immigration support

• Prior-year tax return transcript for I-864 cases.
• Current proof of employment and income.

Deadlines and extensions (plan early)

An extension to file is not an extension to pay. If you owe, pay by the April deadline to reduce interest and penalties.

See irs.gov/forms-pubs for Form 4868 and instructions.

IRS resources and when to get professional help

Start with official IRS pages:

• International taxpayers portal: irs.gov/individuals/international-taxpayers
• Forms and publications: irs.gov/forms-pubs
• IRS Newsroom updates: irs.gov/newsroom
• IRS Individual Online Account: irs.gov/account
• Publication 519 (aliens): irs.gov/pub/irs-pdf/p519.pdf
• Publication 901 (treaties): available via irs.gov/forms-pubs

Professional help is smart when you have dual-status years or treaty positions, foreign entities, or complex foreign reporting needs.

Consider a tax pro if you have FBAR/Form 8938 questions, prior-year nonfiling concerns, or digital asset trading with incomplete cost basis records.

Action items for this week: set up your IRS Individual Online Account, confirm how you will receive refunds without paper tax refund checks, and start your “Get Ready” document folder for tax year 2026 (filed in 2027).

⚠️ Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax situations vary based on individual circumstances. Consult a qualified tax professional or CPA for guidance specific to your situation.