[Ranga_Navile]

Hi,
I am an Indian citizen and was deputed to the US on L1 visa way back in 2006 from my employer who has offices in both India and USA. I am now scheduled to return back to India by April 18, 2009 and continue my work from India.

This means, in the fiscal 2009, I would earn salary in US$ until April 18th and subsequently, in INR for the rest of the financial year.

I know I have to file my US 2009 returns next year while in India for the income earned in the US.

Here are my questions:

1) Should I declare the income and taxes paid in US while filing my returns in India next year ?
2) If I would be subjected to dual taxation, is there a way for me to avoid this by returning earlier to India? What is the ideal time for people in this situation to travel on either direction to avoid dual taxation?

Thanks
Ranga

[AtlantaTaxExpert]

Ranga:

For 2008, you will file as a resident alien, filing Form 1040.

For 2009, you will file as a dual-status alien, filing BOTH Forms 1040 and 1040NR. You will pay taxes to the U.S. on world-wide income earned and receive while located and working inside the U.S. Hence, there is NO ideal travel time unless you choose to wait about 21 December 2009, in which case you can file as a resident alien for 2009 as well.

Finally, if you return to the U.S. on another L visa in 2010, you can file as a resident alien for 2009 under continuous presence.

[MukatA]

For your question on India taxes, post it at mytaxes - Index