Regardless of whether you are a U.S. citizen or a resident alien residing in the United States or abroad, the rules for filing U.S. tax returns remain the same. Resident aliens are people who hold a green card and the rules that apply to the U.S citizens apply to the green card holders as well. Whether you are in the United States, India or any other country in the world, the rules for filing estate, gift, income tax returns and estimated tax payment are the same. Your income, filing status and age determine whether or not you are required to file U.S. tax return.
The tax agreement between the United States and India may eliminate or reduce double taxation of your income. While living outside the U.S., the IRS allows credit for foreign income tax that you pay. These credits might balance any U.S. tax on Indian income that you might owe. However, in order to claim this credit, you have to file your U.S. tax returns every year.
You will only increase your tax liability by not filing your U.S. tax returns. Suppose you live in India for 3 years and then you return to the United States, the IRS may question you about your failure to file your tax returns for the past 3 years. In such cases, the IRS makes assessments which are based on their best estimate of your income. If there is an interest or penalties that you have to pay on any old tax amount, it will accumulate rapidly.
Therefore, instead of the IRS seeking you out for failing to file your tax returns, filing them voluntarily can be beneficial in the following ways.
Filing your U.S. taxes may sound difficult, but if you are working in U.S. or you are a student or a scholar living in U.S. then you should file U.S. tax return whether you have earned any income in the U.S. or not because there are certain benefits to filing your taxes other than it’s the law:
As United States expats living in India are still obligated to report their income to the IRS every year, it is important to file U.S. taxes from India. You have to include all the income earned for that tax year, even the income earned through foreign employment while filing the tax returns. H&R Block India can get your U.S taxes prepared and filed while you are in India by their team of in-house tax experts. H&R Block files both Federal and State tax return. They will also help you file the report of foreign bank and financial accounts with proper tax planning and advice. H&R Block India is known for its complete assistance by a qualified tax advisor who has expertise in handling U.S. as well as India taxes. The tax advisor will help you minimize your taxes and maximize your refund.