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| Did You know? |
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You may reduce your withholding by filing Form W8-BEN/W-4. |
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You may claim an exemption from tax withholding by filing Form 8233. |
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You may maximize the benefit out of foreign taxes paid by claiming a credit or deduction. |
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You may exclude gains on the sale of your home up to $250,000 ($500,000 if you're filing jointly). You generally may claim this exclusion only once in any 2-year period. A loss on the sale of your home, however, isn't deductible. |
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You and your working spouse may claim on your Joint 2006 return a Foreign Earned Income exclusion of up to $171,400. |
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You may file your 1040, 1040NR by 15th June 2008, if you were living outside the US on April 15, 2008. |
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You may carry over/carry back your foreign tax credit. |
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You may exclude last year’s income received in the current year against your last year unclaimed Foreign Earned exclusion. |
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As per the IRS billions of dollars worth of taxes are overpaid on account of the non-filing of tax returns. |
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| Important Tax Consideration |
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As a US citizen/resident your worldwide income is subject to US Tax |
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Significant penalties may be imposed if you do not report on Form TDF-90.22.1 your foreign bank accounts, stock accounts, or other financial accounts if aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year. |
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Non-filing of tax returns may affect your Visa/Green Card status. |
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It is against the law to give up US residency to obtain tax benefits. |
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You have to convert your Indian Rupee income on a calendar year basis into US dollars and then report it on your US tax return. |
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Students have to file Form 8843 to exclude the number of days they stayed in the US for the Substantial Presence test. |
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You cannot claim a foreign tax credit or deduction for any foreign income tax paid on income excluded under the Foreign Earned Income exclusion. |
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You may be subject to Indian income tax on your income in India. |
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| Record Keeping |
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Good recordkeeping can cut your taxes and make your financial life easier.
How long to keep records is a combination of judgment and state and federal statutes of limitations. Since federal tax returns can generally be audited for up to three years after filing and up to six years if the IRS suspects underreported income, it’s wise to keep tax records at least seven years after a return is filed. Requirements for records kept electronically are the same as for paper records. |
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| Records to hold on to: |
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| For Income |
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Wages, Salaries - W-2 |
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Interest and Dividends - 1099-INT and 1099 -DIV |
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Other Income/Misc. Income - 1099 Misc. |
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State Tax Refunds - State income tax return |
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Self-Employment Income - Sales slips, invoices, receipts, sales tax reports, business books & records, etc. |
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Capital Gains and Losses - Broker statement or year-end account summary showing proceeds from sales of securities or other capital assets -
1099 B |
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IRA distribution - Year-end account summary, Form 8606 |
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Pension & Annuities - Records of contributions, 1099 R |
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Rents - Bank statements and other records |
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| For expenses and deductions |
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Canceled checks, bank statements, all business books and records, state and local tax paid receipts, 1098 for mortgage interest, medical and dental expenses bills. |
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2008 Tax Calendar |
| Pay your Estimated Taxes... |
File Your Tax Return... |
Other Important Dates |
| Jan. 15 - 2007 Final Installment |
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Feb. 16 - File Form W-4 for exemption from withholding |
| April 15 - 2008 First Installment |
June 15 - and pay tax due OR file for 6-month automatic extension |
April 15 - Last day for 2007 IRA contributions |
| June 16 - 2008 Second Installment |
June 15 - if you are a US citizen or resident alien living & working abroad |
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| Sept. 15 - 2008 Third Installment |
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Oct. 15 - Automatic extension |
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| Tax Treaty Benefits |
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| How tax treaty benefits may work in your favor: |
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Generally income received by Indian residents as self-employed individuals or independent contractors having no fixed base available in US for their services is exempt from US income taxes if the taxpayer is present in the US for no more than 89 days during the tax year.
Generally income of public entertainers (such as theater, motion picture, radio, or television artists, entertainers, musicians, etc.) or athletes stemming from their performances is exempt from US income taxes if their visit to the United States is wholly funded by the Government or its organizations. If it is not funded, then generally their net income up to $1500 is not taxable.
Generally remuneration received by Indian resident teachers, professors, or research scholars for the purpose of teaching or engaging in research at a university, college, or other recognized educational institution in the US is exempt from tax for a maximum of two years from the date the person first visits the US. However, this exemption applies only if such research is undertaken for the public Interest rather than for private or personal purposes.
Generally Indian student trainees or business apprentices who are non-residents for the purpose of US Tax laws are allowed to claim exemptions and the standard deduction for self, spouse, and dependent(s) under the US-India Tax Treaty. If you are a non-resident of the US, generally you can reduce withholding on certain income such as royalties, interest, and dividends. |
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