Page 1 of 1
In a fix because of FBAR.
Posted: Mon Mar 14, 2016 8:20 am
by ratchet
Okay so we moved to USA in 2013 December.
Started working full time in July 2014.
Now as the tax season is going on, i was told that i have to report all of my accounts in India. I have around $500k in multiple accounts (31 accounts) including my PPF,FDs and other savings accounts . Majority of them are joint accounts with my wife some of which have her name as the primary account holder some of them have mine.
I still file tax return in India and pay taxes on the interest i get from the FDs and everything else.
Now i am a fairly old person who doesn't have too much knowledge about filing FBAR electronically on how to proceed.
Do i have to pay taxes on this in USA even though I have done it in India? I don't have any NRE/NRO accounts as i haven't been to India since i came here and its next on my list.
How do i proceed for this?
In a fix because of FBAR.
Posted: Mon Mar 14, 2016 8:52 am
by okonomi
ratchet;625991Okay so we moved to USA in 2013 December.
Started working full time in July 2014.
Now as the tax season is going on, i was told that i have to report all of my accounts in India. I have around $500k in multiple accounts (31 accounts) including my PPF,FDs and other savings accounts . Majority of them are joint accounts with my wife some of which have her name as the primary account holder some of them have mine.
I still file tax return in India and pay taxes on the interest i get from the FDs and everything else.
Now i am a fairly old person who doesn't have too much knowledge about filing FBAR electronically on how to proceed.
Do i have to pay taxes on this in USA even though I have done it in India? I don't have any NRE/NRO accounts as i haven't been to India since i came here and its next on my list.
How do i proceed for this?
Critical Kwestins:
1. How old are you ?
2. (you were not in the USA long enough in 2013, but) Did you file tax returns in the USA for 2014 ? OR.... were you claimed as a dependent on someone else's US tax return ?
FBAR is simple.
http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html For nervous people, they offer a PDF form filling option, that you can fill as many times as you want, and see if you want to submit that.
If you cannot follow a tax software (like TAXACT, or TurboTax, or many such things) and fill out your tax returns, you can go to a tax filing service in USA -- they are sprouting in strip malls, everywhere in this season -- and ask them to do it for you. You will have to tell them about your foreign incomes, and remind them about tax credits for foreign incomes.
You will have to report all your incomes from your INDIA accounts, and also all the taxes paid to India-IT on those incomes as credit (form 1116) on the taxes owed. If you do not take such credits, you will end up being double-taxed.
Not declaring income, and thus evading taxes, is a crime in the USA; however, not taking credit for taxes you had already paid to India-IT is not a crime. The US treasury would gladly take the money they are not owed, because we are a debtor nation, and we could use such kindness.
You still have a month to go. Try a tax software, fill out your taxes reporting all your india incomes, and see how it goes.
In a fix because of FBAR.
Posted: Mon Mar 14, 2016 2:50 pm
by ratchet
I am 61.
I did file a tax return for 2014. I however didn't declare the income in earned in India in 2014 because of false information I was given by people that I didn't need to declare the income if I already filed my taxes in India.
So I figure I will have to get my tAxes for 2014 amended as well? Can I do this myself?
my income from investments is substantial in India, in the range of 34-38k a year if I convert it to dollars.
I figure I will have to declare that for 2015 tax returns.
I'm also planning on opening a NRO/NRE account as soon as I can to make things easier.
In a fix because of FBAR.
Posted: Mon Mar 14, 2016 3:10 pm
by okonomi
ratchet;626017I am 61.
I did file a tax return for 2014. I however didn't declare the income in earned in India in 2014 because of false information I was given by people that I didn't need to declare the income if I already filed my taxes in India.
So I figure I will have to get my tAxes for 2014 amended as well? Can I do this myself?
my income from investments is substantial in India, in the range of 34-38k a year if I convert it to dollars.
I figure I will have to declare that for 2015 tax returns.
I'm also planning on opening a NRO/NRE account as soon as I can to make things easier.
61 and you call yourself "i am a fairly old person" ? and take advice from "people" about your taxes ?
Does that "fairly" refer to skin-whitening ?
[QUOTE]Can I do this myself?Can you google and learn ? If you can do that, you can do it by yourself. Learn how to file
amended tax returns using google and [URL="http://www.irs.gov"]www.irs.gov.
[/URL] In general, India Tax-slabs are lower and rates are higher than the USA. So your amended return may even get you money back, if you used Tax-credit claims for the taxes you had already paid on the income in India. If you had filed taxes for 2014 using some Tax filing software, use the same software to do the amended return. If you can google, find out what the tax-slabs and rates are in India and the USA, and compare. You will feel a lot better about the whole scenario.
If you plan to live in the USA, and suffer this every year, you might as well learn, and not depend on "people".
Or, like I said before, you can go to the nearest strip mall, where there is a TAX shop, and pay them to do it. They will treat you like an idiot, and you might have to suffer that a little and then pay them a portion of your 34-38K as well.
NRO/NRE account openings will NOT make things easier in so far as the soup that you are in. The earnings from those accounts ought to be declared in your US tax returns, and go through the tax treatment in USA. Relax about those account openings. Not on your critical path.
In a fix because of FBAR.
Posted: Mon Mar 14, 2016 3:17 pm
by dbs
okonomi;626020......Or, like I said before, you can go to the nearest strip mall,....[/quote]
And a strip mall is not what the word 'strip' suggests. It is just a collection of shops laid out at ground level. And 'laid' also means the literal meaning and not the colloquial meaning.
In a fix because of FBAR.
Posted: Mon Mar 14, 2016 3:23 pm
by okonomi
dbs;626022And a strip mall is not what the word 'strip' suggests. It is just a collection of shops laid out at ground level. And 'laid' also means the literal meaning and not the colloquial meaning.
Funny you should say that. In some Tax shops, they could smell a patsy and
take his shirt off for the service of inputting the few numbers on the form and printing a few sheets of paper. Many of those services verify that the walk-in has a valid credit card they could scan before they talk about the person's tax issues.
Years ago, I used to volunteer to fill out tax forms (mostly 1040 and 1040EZ) for the spanish speakers with one or a few wage statements, and a small family. Uncomplicated cases of less than five minutes each. The volunteers went to the local catholic church on Sunday afternoons. In the lull between the morning and evening services, there were families lined up to have their tax forms done. Some of the volunteers were there to enjoy the sight of the children all dressed up in their Sunday best. Volunteers also brought along their own children -- a subliminal education of sorts, when they meet those who are less fortunate.
Many locals know which churches offer this volunteer service. For a fairly old person, this could also be an option.
In the recent years the US-IRS started publishing forms in Spanish.
In a fix because of FBAR.
Posted: Tue Mar 15, 2016 12:33 am
by realgoogler
okonomi;62602061 and you call yourself "i am a fairly old person" ? and take advice from "people" about your taxes ?
Does that "fairly" refer to skin-whitening ?
Can you google and learn ? If you can do that, you can do it by yourself. Learn how to file amended tax returns using google and [URL="http://www.irs.gov"]www.irs.gov.
[/URL] In general, India Tax-slabs are lower and rates are higher than the USA. So your amended return may even get you money back, if you used Tax-credit claims for the taxes you had already paid on the income in India. If you had filed taxes for 2014 using some Tax filing software, use the same software to do the amended return. If you can google, find out what the tax-slabs and rates are in India and the USA, and compare. You will feel a lot better about the whole scenario.
If you plan to live in the USA, and suffer this every year, you might as well learn, and not depend on "people".
Or, like I said before, you can go to the nearest strip mall, where there is a TAX shop, and pay them to do it. They will treat you like an idiot, and you might have to suffer that a little and then pay them a portion of your 34-38K as well.
NRO/NRE account openings will NOT make things easier in so far as the soup that you are in. The earnings from those accounts ought to be declared in your US tax returns, and go through the tax treatment in USA. Relax about those account openings. Not on your critical path.
Don't be scared, don't sweat. There are millions of immigrants who are still America who are still aware of some basic facts
1. What is FBAR ?
2. That America taxes on worldwide income ( So you get max taxed)
3. It is a pay as you go system. You have to pay tax when receive income.
This is a point where I would say it is worth to engage a Tax preparer. There are many. At least I can recommend to one person I know well.
In a fix because of FBAR.
Posted: Tue Mar 15, 2016 5:33 am
by okonomi
realgoogler;626040Don't be scared, don't sweat. There are millions of immigrants who are still America who are still not? aware of some basic facts
1. What is FBAR ?
2. That America taxes on worldwide income ( So you get max taxed)
3. It is a pay as you go system. You have to pay tax when receive income.
This is a point where I would say it is worth to engage a Tax preparer. There are many. At least I can recommend to one person I know well.
Go on ... and recommend away.
As for "you get max taxed",
America offers (1) tax credits for foreign taxes paid and (2) an Income (as well as house expenses) Exclusion for wage income that is earned while living abroad.
And besides, the tax rates and slabs seem higher in India for those who make 5 lakhs (~US$10K) and above in a tax year.
The US treasury (IRS is a branch of that) wastes a lot of money in receiving, examining and approving non-resident tax returns, for scant (or in most cases, no) revenues in exchange. Electing a republican president may eventually get the country to stop this nonsense, and adopt the same world-wide standard in the taxation of Individuals. Tax the residents, and not the non-residents.
In the US, (or if you are a US-person, no matter where you live) you do not get max-taxed, you get max-hassled about tax return paperwork.
In a fix because of FBAR.
Posted: Tue Mar 15, 2016 7:41 am
by realgoogler
okonomi;626060
As for "you get max taxed",
America offers (1) tax credits for foreign taxes paid and (2) an Income (as well as house expenses) Exclusion for wage income that is earned while living abroad.
And besides, the tax rates and slabs seem higher in India for those who make 5 lakhs (~US$10K) and above in a tax year.
So chances are, that for OP Foreign tax paid is more than tax due to IRS at marginal rate and OP might be get some bonus ?
In a fix because of FBAR.
Posted: Tue Mar 15, 2016 8:00 am
by okonomi
realgoogler;626066okonomi;626020.....[URL="http://www.irs.gov"]
[/URL] In general, India Tax-slabs are lower and rates are higher than the USA. So your amended return may even get you money back, if you used Tax-credit claims for the taxes you had already paid on the income in India.....
So chances are, that for OP Foreign tax paid is more than tax due to IRS at marginal rate and OP might be get some bonus ?
Yes. As I had pointed out earlier, the OP might end up with a refund for 2014.
India: 2015-16 slab and rates[TABLE="class: tbl-eligibility"]
[TR]
[TH]Income Tax Slab[/TH]
[TH]Income Tax Rate[/TH]
[/TR]
[TR]
[TD]Income upto Rs. 2,50,000 (~US$3600 )[/TD]
[TD]Nil (same in the USA, called "Std. Deduction")
[/TD]
[/TR]
[TR]
[TD]Income between Rs. 2,50,001 - Rs. 500,000 (~US$7200)[/TD]
[TD]
10% of Income exceeding Rs. 2,50,000[/TD]
[/TR]
[TR]
[TD]Income between Rs. 500,001 - Rs. 10,00,000(~US$14500)[/TD]
[TD]
20% of Income exceeding Rs. 5,00,000[/TD]
[/TR]
[TR]
[TD]Income above Rs. 10,00,000 (> US$14500)[/TD]
[TD]
30% of Income exceeding Rs. 10,00,000[/TD]
[/TR]
[/TABLE]
In order to get to a marginal rate of 30% taxes, one has to be making in excess of US$90K in USA.Indian tax payers earning a lot more than 10 lakhs a year are paying multiple times a US tax payer making similar amounts in US$.
For Individual Taxpayers 2015 rates ( Since USA allows married people filing tax return jointly, the rates would be even lower) 