musiclover
Registered Users (C)
Some of these questions have been answered already in other threads. I am attempting to consolidate them and get a few clarifications.
So I have been a GC holder for a few years now. I understand that if one is under H1b, the rules are same if they file a resident tax return. My taxes are being filed in India on my behalf with a PAN card. On my taxes in India there are two sources of Income.
1) Interest earned on loans given out to private companies.
2) Interest earned on a PPF account (which has maybe another year of eligibility left).
Since the amounts are not very high, the tax liability in India is zero.
Since I have become a resident, I have always included this income along with other taxable interest income from US banks (for which I get a 1099). This increases my tax liability in US and I do not get any foreign tax credit as I pay no taxes in India. Lot of people have suggested to me in the past that I am being stupid paying taxes when there is no way IRS can trace my Indian accounts but I have been playing it safe and reporting it. Especially since the amounts are not very high.
I also maintain a regular savings account in India. I have recently found that it is not allowed and I should look into NRE/NRO accounts. I am currently researching the options and will soon close the savings account and open a NRI (NRE and NRO) accounts.
Questions:
1) Am I doing the right thing in reporting interest income from all sources?
2) Should I include the PPF interest (which is tax free in India and reported accordingly on the Indian return) as taxable interest in my US return?
3) NRE interest is tax exempt in India. I am thinking it has to be taxed in US. Correct?
4) NRO interest is taxed in India at source and can be refunded with a return depending on total income for the year. In the end, I am guessing I should report the interest income from NRO account in US, and claim credits, if any, for taxes paid in India. If I paid no taxes in India, I would just be paying the tax here. Correct?
5) I have read about the form TD92.21.
5 a) Does the $10,000 limit include both mine and my wife's assets? Or is it $10,000 per person and $20,000 for Married Filing Jointly?
5 b) As I understand the $10,000 is not just cash, it can be an investment account, property etc. that are in either of our names. Correct?
Sorry about repeating some of the issues that are already answered else where. Replies would be appreciated.
Thanks.
So I have been a GC holder for a few years now. I understand that if one is under H1b, the rules are same if they file a resident tax return. My taxes are being filed in India on my behalf with a PAN card. On my taxes in India there are two sources of Income.
1) Interest earned on loans given out to private companies.
2) Interest earned on a PPF account (which has maybe another year of eligibility left).
Since the amounts are not very high, the tax liability in India is zero.
Since I have become a resident, I have always included this income along with other taxable interest income from US banks (for which I get a 1099). This increases my tax liability in US and I do not get any foreign tax credit as I pay no taxes in India. Lot of people have suggested to me in the past that I am being stupid paying taxes when there is no way IRS can trace my Indian accounts but I have been playing it safe and reporting it. Especially since the amounts are not very high.
I also maintain a regular savings account in India. I have recently found that it is not allowed and I should look into NRE/NRO accounts. I am currently researching the options and will soon close the savings account and open a NRI (NRE and NRO) accounts.
Questions:
1) Am I doing the right thing in reporting interest income from all sources?
2) Should I include the PPF interest (which is tax free in India and reported accordingly on the Indian return) as taxable interest in my US return?
3) NRE interest is tax exempt in India. I am thinking it has to be taxed in US. Correct?
4) NRO interest is taxed in India at source and can be refunded with a return depending on total income for the year. In the end, I am guessing I should report the interest income from NRO account in US, and claim credits, if any, for taxes paid in India. If I paid no taxes in India, I would just be paying the tax here. Correct?
5) I have read about the form TD92.21.
5 a) Does the $10,000 limit include both mine and my wife's assets? Or is it $10,000 per person and $20,000 for Married Filing Jointly?
5 b) As I understand the $10,000 is not just cash, it can be an investment account, property etc. that are in either of our names. Correct?
Sorry about repeating some of the issues that are already answered else where. Replies would be appreciated.
Thanks.