What part of CTC to report to US govt for income purposes
What part of CTC to report to US govt for income purposes
Do I report my entire CTC as income or subtract the PF and benefits etc? What about HRA. No guidance from IRS on this.
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kkassociate
- Posts: 173
- Joined: Mon Oct 05, 2009 4:45 pm
What part of CTC to report to US govt for income purposes
Hi,
On US tax returns you need to consider the gross salary received. The exemption and benefits allowed on the salary in India is only limited to the Income taxes in India and nothing to do with the US tax benefits. Also the DTAA between US and India is silient on this. Hence we follow the practise of considering the gross CTC including PF and exemption. The taxes deducted at source are sufficient to cover any tax liability in the US as the effective tax rates is generally higher in India than in the US.
We provide both US and India tax filing and planning services. You can send us your tax questions on [email protected] or visit us on www.kkassociate.com
Regards,
KKA
US and India tax filers.
www.kkassociate.com
On US tax returns you need to consider the gross salary received. The exemption and benefits allowed on the salary in India is only limited to the Income taxes in India and nothing to do with the US tax benefits. Also the DTAA between US and India is silient on this. Hence we follow the practise of considering the gross CTC including PF and exemption. The taxes deducted at source are sufficient to cover any tax liability in the US as the effective tax rates is generally higher in India than in the US.
We provide both US and India tax filing and planning services. You can send us your tax questions on [email protected] or visit us on www.kkassociate.com
Regards,
KKA
US and India tax filers.
www.kkassociate.com
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Old-Spice2
- Posts: 1898
- Joined: Wed Jan 17, 2007 11:38 pm
What part of CTC to report to US govt for income purposes
kkassociate;428510Hi,
On US tax returns you need to consider the gross salary received. The exemption and benefits allowed on the salary in India is only limited to the Income taxes in India and nothing to do with the US tax benefits. Also the DTAA between US and India is silient on this. Hence we follow the practise of considering the gross CTC including PF and exemption. The taxes deducted at source are sufficient to cover any tax liability in the US as the effective tax rates is generally higher in India than in the US.
We provide both US and India tax filing and planning services. You can send us your tax questions on [email protected] or visit us on www.kkassociate.com
Regards,
KKA
US and India tax filers.
www.kkassociate.com
Why is this an issue as $80K per year of foreign income is excluded from any US tax?
What part of CTC to report to US govt for income purposes
Old-Spice2;428543Why is this an issue as $80K per year of foreign income is excluded from any US tax?
1. Stacking rule
2. Some people earn more than USD 80K :)
What part of CTC to report to US govt for income purposes
The Foreign Earned Income Exclusion, which lets you to exclude up to $91,500 (Source: https://news.fidelity.com/news/article.jhtml?guid=/FidelityNewsPage/pages/fidelity-4-things-to-know-to-retire-abroad&topic=living-in-retirement )