[davekothi]

Hello all,

First time posting here but have started reading through the different threads. I'm looking for some tax help/advice as I simply do not understand this and the different sites is only confusing me.

My family (me, my wife, two young boys) are asked to relocate to Mumbai for a 2 year job opportunity for my current employer. Per my 'package' they will convert me to a Indian employee and will ask me to sign an Indian employment contract. I will be paid in Rupees as well. Doing my research, I know I will have to pay 30% Indian taxes for my earnings (15 million INR/$230k USD). I'm trying to figure out how much taxes I will have to pay to Uncle Sam. I'll be paid also yearly bonus which I will be taxed on in India and USA but trying to understand the calculation of my US taxes and then the rest will make sense.

Any help or advice would be greatly appreciated!

 

[Bevdeforges]

Best bet is for you to get a copy of IRS publication 54 for overseas taxpayers. As a US citizen, you are supposed to file US taxes no matter where you are in the world, and you declare your worldwide income.

Take a look at Pub 54 for the details, but basically, you declare everything to the US, and then they allow you to invoke the Foreign Earned Income Exclusion for your "earned income" (i.e. salary, bonuses, etc.) for up to about $100K to avoid double taxation. The process for avoiding double taxation is a bit trickier for investments and other "passive" income, but generally involves claiming a tax credit for income taxes paid to a foreign tax authority.
Cheers,
Bev