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Indian Citizen,currently Singapore tax resident moving to US

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blessedone
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Indian Citizen,currently Singapore tax resident moving to US

Postby blessedone » Wed, 20 Jun 2012 7:30 pm

I am an Indian citizen, considered a resident in Singapore and tax payer thereof for the last 3 years (4 years inclusive of this years filing). I am relocating to the US on a work permit.
1. The financial year in SG and US is the same - Jan - Feb. I expect to file taxes here before leaving. so will I be taxed only for the time period I actually stay in the US?
2. I believe US has a double taxation treaty with India, but I haven’t paid taxes in India for the income I earn in Singapore given I am a resident here. so how will this be taken into account while filing taxes
3. Worldwide taxation - I have no income from any other source apart from my employment but I retain a bank account in India to send money to - so yes do earn a little from the interest. does that need to be declared while filing US Taxes?

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Re: Indian Citizen,currently Singapore tax resident moving t

Postby ksan26 » Thu, 21 Jun 2012 11:15 pm

blessedone wrote:I am an Indian citizen, considered a resident in Singapore and tax payer thereof for the last 3 years (4 years inclusive of this years filing). I am relocating to the US on a work permit.
1. The financial year in SG and US is the same - Jan - Feb. I expect to file taxes here before leaving. so will I be taxed only for the time period I actually stay in the US?

The US tax year is the calendar year (January to December) and not January to February. I presume you are coming to the US on an H1B visa (or L1). The tax that you pay in the US depends on your status as a tax resident. If you are moving after June 30 you will spend less than 183 days in the US during the current tax year and will be treated as a non-resident. You may choose to file as a tax resident but it will mean higher tax liability for you.

So it will be better to file as a non-resident and use form 1040NR or 1040NR-EZ if you do not have any dependents. That way you only pay taxes on your US source income for the current year. In the US if you go to a tax preparer they will most likely use form 1040 which is for residents and that will require you to report your worldwide income and will require you to pay taxes on your worldwide income.


2. I believe US has a double taxation treaty with India, but I haven’t paid taxes in India for the income I earn in Singapore given I am a resident here. so how will this be taken into account while filing taxes

That does not depend on you filing taxes in India and in any case if you are not filing Indian taxes it is immaterial.

3. Worldwide taxation - I have no income from any other source apart from my employment but I retain a bank account in India to send money to - so yes do earn a little from the interest. does that need to be declared while filing US Taxes?

When you file taxes as a resident you are required to report your foreign bank accounts and any interest income if the balance in those accounts is more than $10000. If it is less than $10000 you need not report those accounts. Note that this is not just your bank account balance but any financial account including pension fund, brokerage account, mutual funds or anything similar. If you plan to return after a short stint in the US then you need not worry about it.


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zzm9980
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Re: Indian Citizen,currently Singapore tax resident moving t

Postby zzm9980 » Fri, 22 Jun 2012 9:17 am

ksan26 wrote:So it will be better to file as a non-resident and use form 1040NR or 1040NR-EZ if you do not have any dependents. That way you only pay taxes on your US source income for the current year. In the US if you go to a tax preparer they will most likely use form 1040 which is for residents and that will require you to report your worldwide income and will require you to pay taxes on your worldwide income.


This statement you made implies your tax liability is dependent on which form you file. That is absurd. Your tax liability is your tax liability, and does not change just because you filed a different form that has more or less fields for reporting different things.

I strongly suggest the OP consult a US Tax accountant or lawyer. If IRS feels you mis-represented your income in your tax filings, you could be subject to complicated audits, expensive penalties, and/or put future visa status in jeopardy.

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Postby sundaymorningstaple » Fri, 22 Jun 2012 9:57 am

Start here: http://www.irs.gov/businesses/small/int ... 92,00.html

ZZM, ksan26 is correct depending on circumstances on the year of arrival or year of departure.

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Postby blessedone » Fri, 22 Jun 2012 12:22 pm

[quote="sundaymorningstaple"]Start here: http://www.irs.gov/businesses/small/int ... 92,00.html

/quote]

I checked here and the substantial presence test conditions - I qualify since I spent time on b1 . :???: which is contributing to the # of days spent there.

but I didnt earn anything and was visiting for business.

thoughts?

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blessedone
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Re: Indian Citizen,currently Singapore tax resident moving t

Postby blessedone » Fri, 22 Jun 2012 12:25 pm

ksan26 wrote:
blessedone wrote:I am an Indian citizen, considered a resident in Singapore and tax payer thereof for the last 3 years (4 years inclusive of this years filing). I am relocating to the US on a work permit.

3. Worldwide taxation - I have no income from any other source apart from my employment but I retain a bank account in India to send money to - so yes do earn a little from the interest. does that need to be declared while filing US Taxes?

When you file taxes as a resident you are required to report your foreign bank accounts and any interest income if the balance in those accounts is more than $10000. If it is less than $10000 you need not report those accounts. Note that this is not just your bank account balance but any financial account including pension fund, brokerage account, mutual funds or anything similar. If you plan to return after a short stint in the US then you need not worry about it.



Thank you - I will be mindful of that. I plan to be there on a long term non immigrant visa, so yes this will definitely come into the picture

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blessedone
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Re: Indian Citizen,currently Singapore tax resident moving t

Postby blessedone » Fri, 22 Jun 2012 12:27 pm

ksan26 wrote:
blessedone wrote:I am an Indian citizen, considered a resident in Singapore and tax payer thereof for the last 3 years (4 years inclusive of this years filing). I am relocating to the US on a work permit.
1. The financial year in SG and US is the same - Jan - Feb. I expect to file taxes here before leaving. so will I be taxed only for the time period I actually stay in the US?

The US tax year is the calendar year (January to December) and not January to February. I presume you are coming to the US on an H1B visa (or L1). The tax that you pay in the US depends on your status as a tax resident. If you are moving after June 30 you will spend less than 183 days in the US during the current tax year and will be treated as a non-resident. You may choose to file as a tax resident but it will mean higher tax liability for you.

So it will be better to file as a non-resident and use form 1040NR or 1040NR-EZ if you do not have any dependents. That way you only pay taxes on your US source income for the current year. In the US if you go to a tax preparer they will most likely use form 1040 which is for residents and that will require you to report your worldwide income and will require you to pay taxes on your worldwide income.




if I move even in August I should be there less than 183 days ,however I spent time on B1 at the start of the year :( how does this contribute to the taxation piece?

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Postby sundaymorningstaple » Fri, 22 Jun 2012 1:47 pm


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zzm9980
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Postby zzm9980 » Fri, 22 Jun 2012 1:58 pm

sundaymorningstaple wrote:ZZM, ksan26 is correct depending on circumstances on the year of arrival or year of departure.


My point was one shouldn't assume something based on the presence or absence of fields on a US tax form. His answer reads like "Use this form, and you pay less!" but for the wrong reasons.

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sundaymorningstaple
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Postby sundaymorningstaple » Fri, 22 Jun 2012 2:09 pm

Fair enough. :wink:

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blessedone
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Did try this already

Postby blessedone » Fri, 22 Jun 2012 10:11 pm

sundaymorningstaple wrote:http://www.irs.gov/businesses/small/international/article/0,,id=129391,00.html


This is where my question has arisen from as I did spend time on B1 there, so my question is does that contribute to the substantial presence test or not?


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