Who needs to file taxes: As tax season approaches, many undocumented workers in Los Angeles are wondering whether they should file their taxes, especially given the current deportation concerns under new federal policies. The short answer is using your own judgement, for all others the answer is yes—filing taxes can provide significant benefits, even for those without legal status. However, there are risks and challenges that must be considered.
In the U.S., anyone who earns income above a certain threshold is required to file taxes, regardless of their immigration status. The Internal Revenue Service (IRS) does not share taxpayer information with immigration enforcement agencies, making it relatively safe for undocumented workers to file.
According to the IRS guidelines for 2025, individuals must file if:
- They earn above $12,950 as a single filer.
- They are married filing jointly with an income above $25,900.
- They are self-employed and earned more than $400.
- Taxes were withheld from their paychecks, and they wish to claim a refund.
Many undocumented workers use an Individual Taxpayer Identification Number (ITIN) to file their returns, which allows them to comply with tax laws without requiring a Social Security Number.
There are several benefits to filing taxes, even for those without legal status:
- Building a Financial Record: Filing taxes creates a financial paper trail that could be useful for future immigration cases, such as applying for residency or work permits.
- Claiming Refunds and Tax Credits: Some undocumented workers qualify for the Child Tax Credit (CTC) or the Earned Income Tax Credit (EITC) if they have U.S.-born children with valid Social Security numbers.
- Demonstrating Good Moral Character: A history of tax compliance can help individuals applying for legal residency or citizenship.
- Avoiding Legal Penalties: Not filing taxes when required can lead to fines, interest on unpaid taxes, and potential legal consequences.
How to File for a Tax Extension
For those who need more time to gather documents, filing an extension is an option. This provides an additional six months, moving the deadline from April 15 to October 15.
To file an extension:
- Complete IRS Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return).
- Submit the form electronically using tax software or mail it to the IRS before the April deadline.
- Pay any estimated taxes owed to avoid interest or penalties.
Pros and Cons of Filing a Tax Extension
Pros:
- Additional time to gather necessary documents.
- Helps avoid late-filing penalties.
- Allows for more time to seek assistance from tax preparers or community organizations.
Cons:
- Does not extend the deadline for paying any owed taxes.
- Interest will continue to accrue on unpaid taxes.
- May delay access to potential tax refunds.
Short and Long-Term Consequences of Not Filing Taxes
Failing to file taxes can have both immediate and lasting consequences:
Short-Term Consequences:
- Fines and penalties: The IRS imposes a failure-to-file penalty of 5% of unpaid taxes for each month the return is late.
- Loss of tax refunds: If a taxpayer is owed a refund but fails to file, they forfeit that money after three years.
- Difficulty obtaining loans: Banks and mortgage lenders often require tax returns for loan approvals.
Long-Term Consequences:
- Impact on immigration status: Not paying taxes can be used as a negative factor in immigration cases.
- IRS enforcement actions: The IRS can issue liens or levies on assets for unpaid taxes.
- Legal risks: Persistent failure to file may result in legal action from the government.
The Latino community, which makes up nearly 50% of Los Angeles’ population, is disproportionately affected by tax policies and immigration enforcement. According to the Institute on Taxation and Economic Policy, undocumented immigrants contribute approximately $11.7 billion annually in state and local taxes.
By filing taxes, Latino workers in Los Angeles demonstrate their economic contributions and create a financial record that may support future legal status applications. Community advocacy groups, such as the Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA), encourage undocumented individuals to remain compliant with tax laws to protect their future opportunities.
While most undocumented workers file taxes honestly, there are instances of tax fraud, such as:
- Filing fraudulent returns using false income to claim larger refunds.
- Misusing ITINs to file under multiple identities.
- Claiming ineligible tax credits, such as the Earned Income Tax Credit when they do not meet residency requirements.
The IRS has increased enforcement against fraudulent filings, leading to audits and penalties for those caught abusing the system.
Final Thoughts
Despite the uncertainty surrounding immigration policies, filing taxes remains an important step for undocumented workers in Los Angeles. It provides financial benefits, helps build a legal record, and contributes to the local economy. With proper planning and guidance from tax professionals, undocumented individuals can navigate tax season confidently while protecting their future.
For those unsure about their filing obligations, seeking help from community organizations or professional tax preparers can provide clarity and assistance in making the best financial decision.
