u.s. expat tax guide – india
Main Filing Statuses and IRS Reporting for US Expats in India
The IRS has four main filing statuses:
- Single
- Married Filing Jointly
- Married Filing Separately, and;
- Head of Household.
Your filing status affects the income threshold that determines whether you need to file a tax return.
Here are the filing thresholds for the 2024 tax year:
| Filing Status | Age Under 65 | Age 65 or Older |
| Single | US$14,600 | US$16,750 |
| Married Filing Jointly | US$29,200 (both under 65) | US$30,800 (one over 65) / US$32,300 (both over 65) |
| Married Filing Separately | US$5 | US$5 |
| Head of Household | US$21,200 | US$23,400 |
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Single: If you are not married and your income exceeds US$14,600 (or US$16,750 if you are over 65), you need to file a US tax return.
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Married Filing Jointly: If you are married and filing jointly with your spouse, the threshold is US$29,200 if both spouses are under 65. The threshold increases if one or both spouses are over 65.
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Married Filing Separately: This status catches many people by surprise because the filing threshold is only US$5. If you are married but filing separately, even a small amount of income requires you to file a return. This often affects Americans married to non-US citizens, as even a few dollars of interest income can trigger the requirement.
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Head of Household: If you qualify as head of household (e.g., you are unmarried and supporting a dependent), your threshold is US$21,200 if you are under 65, and US$23,400 if you are 65 or older.
What types of income should US expats report to the IRS?
If you need to file a tax return, you must report all worldwide income. This includes income from wages, self-employment, investments, and other sources, regardless of where it was earned. Here are the main types of income that need to be reported:
- Wages or Salary: Any income earned from employment, regardless of whether it’s from an Indian or US employer.
- Self-Employment Income: If you are self-employed in India, you need to report all business income.
- Interest and Dividends: Any interest from bank accounts or dividends from investments must be reported, even if the accounts are in India.
- Capital Gains: If you sell stocks, bonds, or real estate, you need to report any capital gains.
- Rental Income: If you own rental property, either in India or elsewhere, that income must also be reported.
- Pension and Retirement Distributions: Any distributions from retirement accounts, including Indian retirement plans, need to be included.
- Social Security Benefits: If you receive Social Security, you need to report it to the IRS, though it may not all be taxable.
Do Green Card holders in India need to file US taxes?
Yes, Green Card holders living in India must follow the same US tax filing requirements as US citizens. This means reporting all worldwide income to the IRS and meeting the same income thresholds.
Green Card holders must also file an FBAR (Foreign Bank Account Report) if their foreign bank accounts total more than US$10,000 at any point during the year.
Do US expats need to report foreign accounts if they have low income?
Even if your income is below the filing threshold, you may still have other reporting obligations.
As stated before, if the value of your foreign accounts exceeds US$10,000 at any point during the year, you must file an FBAR. Additionally, if you have substantial foreign assets, you may also need to file Form 8938 (Statement of Specified Foreign Financial Assets).
Why is it important for US expats to file correctly?
Failing to file a required tax return or FBAR can result in serious penalties. The IRS may impose fines of up to US$10,000 per violation, or even more if the failure is considered willful. It’s crucial for US citizens and Green Card holders in India to understand their tax obligations and comply with all filing requirements to avoid these penalties.
Filing US taxes while living abroad can be complicated, especially with different filing statuses and various income sources to consider.
If you are unsure about your filing obligations, consulting with a tax professional who understands both US and Indian tax laws can help ensure that you remain compliant and avoid costly penalties.
