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Question for the Money Doctors

Question submitted on Aug 27, 2012.

Question

Hi,
Iam from India. I will be working in US for one year. I will be paid salary in my home country. When iam in US my company pays me for the apartment and car. They just pay me food allowance of $39. Should i have to pay tax if iam paied more than $39 per day. please advice.

Thank you
Lakshmi.G

Answer

Hi Lakshmi,

You will be treated as a resident alien for US income tax purposes, which means that your income will generally be subject to tax in the same manner as a U.S. citizen. Barring specific US/India treaty exemptions you will report all income on a US tax return whether from sources within or outside the US, including interest, dividends, wages, housing/car allowances, income from rental property or royalties, etc. 

Please visit www.findacpapfs.com   to find a CPA/PFS in your area, who will be able to help you interpret the treaty provisions as well as advise you on both Federal and State tax treatment of resident aliens. 


For additional information visit http://www.360financialliteracy.org/