Hi,
:confused:
I am in US from last 1 month, on STL1 (Short Term L1), I have query regarding Double Taxation, as I am paid Gross Salary in India and in US I am getting amount as per Diem.
I need to understand, what % of TAX I need to pay in US on my Indian Salary and what % of TAX I need to pay on Per Diem in US.
As I know about Indian Tax rules, but do not know any thing about US TAX Law.
Second question is if I am here for 6 months in US in Dec when I am filling return in US, do I need to mention what all TAX I have already paid in India between July to Dec and in that scenario, will I be getting any TAX back.
Third Point when I am filling TAX return in India, and I mention the Income earned in US and Tax paid in US, can I claim TAX paid in US in India also.

Thanks
Nitin Tandon

1. L1 is work visa. Any income in the U.S. is subject to Social Security and Medicare taxes.

2. You may need to file resident tax return, nonresident tax return or dual status tax return depending upon number of days in the U.S. Read about substantial presence test Your U.S. Tax Return: Substantial Presence Test (http://taxipay.blogspot.com/2008/04/substantial-presence-test.html)

3. For the income you receive in the U.S. your employer will issue you Form W2. Depending upon on which line the income is reported, it may be taxable income or non taxable income. If Per diem paid to you is not reported in box 1 of W2, then you do not need to report it.

If you are working in the U.S. for less than a year in 2008, and you anticipate that you will NOT work in the U.S. in 2009, you can deduct your daily living expenses (food, transportation, lodging, incidentals) as an employee business expense using Form 2106 and Schedule A under Form 1040NR.

This applies IF the per diem you are being paid is taxed.

If the per diem is NOT being taxed, then you cannot claim these deductions.