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-   -   1099 contractor living in India? (https://www.askmehelpdesk.com/showthread.php?t=268477)

  • Oct 12, 2008, 07:04 AM
    us2india
    1099 contractor living in India?
    I am a US citizen, that is going to be moving to India. My husband will have a job in India, and I plan to be an independent software contractor, working out of my home in India. Can the company that hires me as an independent contractor just give me a 1099, or do I have to be resident in the US to be a 1099 contractor? What are the tax implications of this? If I cannot be a 1099 contractor, what are my other options?
  • Oct 12, 2008, 07:12 AM
    MukatA

    You did not clarify if you will work for the U.S. company or the Indian company. How long you intend to stay in India?

    You can be an independent contractor for the U.S. company or the Indian company.

    You must file your U.S. tax return if the worldwide income is more the filing requirement. Read: Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income
  • Oct 12, 2008, 07:19 AM
    us2india

    Sorry for not clarifying, the company I will be contracting for will be a US company. IN that case, can they treat me as a 1099 contractor? Also, can I deduct expenses, etc. in this scenario?
  • Oct 12, 2008, 07:31 AM
    MukatA

    On the U.S. tax return, the income as independent contractor is reported on Schedule C (Form 1040). You can deduct business related expenses.

    Your income will also be taxable in India. For India taxes, you can try mytaxes - Index
  • Oct 12, 2008, 10:06 AM
    us2india
    So, at that point, will I doubly taxed? Or do I need to claim a refund on one of them? Thanks so much for your help.
  • Oct 13, 2008, 05:36 AM
    MukatA

    Since the income is earned in India, you will pay India income tax. On your U.S. tax return, you will claim foreign tax credit by filing Form 1116. However, you will pay 15.3%SS tax.
  • Oct 13, 2008, 08:52 AM
    AtlantaTaxExpert
    Also, if you stay in India for over a year, the Foreign Income Exclusion (Form 2555) is also an option. This exclusion is good for about $85,000.

    Self-employment taxes STILL apply, however.
  • Oct 13, 2008, 09:55 AM
    us2india
    Thanks for your responses. Do I need to pay self-employment taxes only if I get paid in $$ here, or even if I get paid in Rupees while in India? Is there way at all to avoid that, for example, have some kind of sole proprietorship (or the Indian equivalent of that) in India while I am there?
  • Oct 13, 2008, 11:55 AM
    MukatA

    If you are self employed or independent contractor, you pay self employment tax. This income is reported on Schedule C (Form 1040), and on this form you must report yourself employment tax.

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