Are you a US citizen or a green card holder and now staying outside the US ? If yes, please read this article. In case you were in the US for a short period of time, could be a few months or even a few years on a work visa and have now relocated back to your country, please read this article :
If you are a
- US citizen or
- A green card holder
and you move to any other country outside the US, you “MUST” file your US tax return each year. This is irrespective of your residential status. You may stay anywhere in the world, but you will still be subject to US tax rules.
Disclosure of global income
Not only you have to file your US tax return, but you also have to dislose your world wide income to the IRS (yes…that includes income earned anywhere in the world). If you are staying in India, this would include your salary income in India, interest, dividend, capital gains…everything.
Now does this mean that you will be taxed twice on your income, once in the place you are staying and once in the US ? No, disclosing your global income does not mean you will be taxed on this income. The US has tax treaties with several countries known as Double Taxation Avoidance Agreements (DTAA) . These agreements provide guidance on how should you tax your income in a particular country and claim a deduction or tax credit in the other country. They help to avoid the incidence of double taxation.
You can check out the US – India treaty using the folowing link:
https://www.irs.gov/businesses/international-businesses/india-tax-treaty-documents
The tax filing rules ofcourse will not apply if your income is beow the US taxable limit. However, you may still need to file if you are claiming any deductions or tax credits or need to carry forward any losses. You may want to consult your tax preparer if any of these situations apply to you.
Other disclosure requirements:
In addition to filing US taxes, make sure that you also comply with other reporting requirements such as filing FBAR.
