US Tax Accountant for Indians in the USA

If you are a US tax resident for the year, yes — US residents are taxed on worldwide income, which includes Indian salary, bank and NRO interest, rental income, dividends and capital gains, whether or not the money is ever brought to the US. Most H-1B and L-1 holders become residents by meeting the substantial presence test. That does not mean paying twice: tax already paid in India, including TDS, is generally creditable against your US liability on Form 1116, and the India-US tax treaty provides further relief. Non-residents are taxed only on US-source income, which is why establishing your status first matters so much.

You must file an FBAR (FinCEN Form 114) if the combined highest balance of all your foreign financial accounts exceeded $10,000 at any point during the year. That is an aggregate across every account, not per account, and it counts the peak balance rather than the year-end balance — so a single large transfer through an Indian account can trigger it even if the account is normally near-empty. NRE, NRO, savings, fixed deposits, and Indian demat and brokerage accounts all count, including accounts you only hold jointly with a parent. Form 8938 is a separate FATCA disclosure filed with your tax return, with different and higher thresholds that depend on your filing status and whether you live in the US or abroad. Many people have to file both, and they are not substitutes for each other.

They usually need careful handling. Indian mutual funds are generally treated as PFICs — passive foreign investment companies — under US rules, and PFICs are reported on Form 8621 and taxed under a regime that is deliberately unfavourable. The default excess-distribution method can tax gains at the highest ordinary rate for the years involved and add an interest charge, which frequently produces a worse result than holding an equivalent US fund. There are elections that improve the outcome, but the QEF election needs annual information most Indian fund houses do not supply to US investors. This is the single most common expensive surprise we see for Indians on H-1B, and it is worth reviewing before you add to those holdings, not after.

Often yes, and it is frequently worth doing. If your spouse is not eligible for a Social Security number, you apply for an ITIN on Form W-7, which is submitted together with the tax return rather than in advance. If you are a resident and your spouse is not, you can generally elect to treat them as a resident so you can file jointly — which usually gives a better outcome than filing separately, but it also brings their worldwide income into the US return. We compute it both ways so the choice is made on numbers rather than assumption.

Address it deliberately rather than by simply starting to report this year, which leaves the earlier years open. The IRS operates catch-up routes, including the Streamlined Filing Compliance Procedures, intended for taxpayers whose failure to file was not wilful, and these generally involve amended returns and FBARs for a defined look-back period. Which route fits depends on the facts, and the distinction between non-wilful and wilful conduct carries very different consequences. This is a situation to get specific advice on before filing anything, and we will tell you plainly if your circumstances need a tax attorney rather than a preparer.

Not quite. The treaty allocates taxing rights and provides mechanisms to avoid the same income being fully taxed twice, but it does not simply exempt you in one country. In practice relief usually arrives as a foreign tax credit for the tax paid in the other country, and in some cases as a reduced rate on particular categories of income such as interest, dividends and royalties. Students and certain trainees have specific articles that can apply to them. Treaty positions have to be claimed correctly on the return, and sometimes disclosed on Form 8833, so they need to be applied to your facts rather than assumed.