2019 & Earlier US  INCOME TAX RETURN PREPARATION AND PLANNING FOR US EXPATRIATES LIVING IN INDIA

We have  been preparing US income tax returns for US Citizens and permanent residents living in India for over 35 years. As a US Citizen or permanent resident (green card holder) you are required to file a US return each year regardless of the fact that you file and pay taxes in your residence country. The expatriate earned income exemption ($92,900 for 2011) only can be claimed if you file a timely tax return. It is not automatic if you fail to file.

We have scores of clients located in India and know how to integrate your US taxes into the local income taxes you pay.  Any income tax you pay there can be claimed as  a dollar for dollar credit against the tax on your US return on the same income.

As an expat living abroad you get an automatic extension to file it until June 15th following the calendar year end.  (You cannot file using the Indian tax fiscal year for US tax purposes). You must pay any tax that may be due by April 15th in order to avoid penalties and interest. You can get an extension to file (if you request it) until October 15th.

There are other forms which must be filed if you have foreign bank or financial accounts;  foreign investment company; or own 10% or more of a foreign corporation or foreign partnership.   If you do not file these form or file them late the IRS can impose penalties of $10,000 or more per form.  These penalties are due regardless of whether you owe income taxes or not.

 There are certain times you may wish to make elections with respect to your Indian Corporation or Investment Company which will give you US tax benefits.  There are other situations where forming a US corporation to receive your business income may be more advantageous than using a corporation in your resident country. We can help you with these decisions.

If you are self employed while working in India, you will have to pay US self employment taxes (social security).   If you are a bona-fide employee you do not have to worry about paying US social security on your wages earned in India.

We have helped hundreds of expats around the world catch up because they have failed to US returns for many years. Unfortunately, unlike India, Canada, UK, etc. you must also file so long as you are a US citizen or resident.  You can if you follow proper IRS and State Department procedures surrender your US Citizenship and therefore cut off your obligation to pay US taxes in the future. You must surrender that Citizenship for non-tax avoidance reasons and then can usually not return to the US for more than 30 days per year for the subsequent ten years.

You can more read about the Indian Income Taxes and  Procedures  HERE

Let us help you with your US tax returns, US tax planning and other US tax and legal concerns.  Download our expat tax questionnaire below or email us to request a mini  consultation by phone, skype or email

I look forward to solving your tax concerns. Thanks

Don D. Nelson, Attorney at Law, partner in Kauffman Nelson LLP, US Certified Public Accountants