Home Page link  

Is income from US employer paid for work performed abroad tax exempt?

 

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated)

 Post an article  get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
Is income from US employer paid for work performed abroad tax exempt? buddhuram 04-12-2007
Posted by buddhuram on April 12, 2007, 6:32 pm
Please log in for more thread options
I am a nonresident (Indian) looking for advice regarding
filing my 2006 taxes.

During 2006 I was on F1-OPT till June 28. I started work
from my employer in Wash DC on April 24. Since my OPT
expired in June, I relocated to the New Delhi office of my
company in order to remain in status and still continue my
work, while the mothership processed my H1 visa. I worked
from June 29 to December 4 out of the Delhi office and
returned to the US with my H1 visa on December 5. During my
time in India, my wages were being directly deposited to my
US account by my employer and federal/state taxes being
withheld as if I was still in DC. Consequently my W2 shows
my income from April 24 till the end of the year.

In sum, I earned around 40k in total from:
Jan 1 - April 23 No job
April 24 - June 28 on F1 OPT
June 29 - December 4 worked in India for the same company
December 4 - December 31 on H1 B

So my question is: Is the income - for the five months I was
in India - tax exempt? If yes, where do I show it on 1040NR?

A related question - Since the majority of the income I
earned while I was in the US was while I was on my F1-OPT
(April 24 - June 28) can I still claim the standard
deduction for Indian students?

Kindly let me know your thoughts.
Thanks so much in advance.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Similar ThreadsPosted
Working as a contractor in Saudi but paid by American company - Tax exempt? November 1, 2008, 1:47 pm
Can mortgage interest paid to a foreign lender be considered portfolio interest (tax exempt)> March 10, 2007, 1:06 am
relocation income from my employer in box 1 ??? March 11, 2007, 12:23 pm
foreign earned income exclusion for part year of living abroad January 11, 2008, 12:29 pm
Taxable income: when accrued or when paid January 7, 2007, 11:30 pm
How to report business income when paid by credit card? April 12, 2007, 12:06 am
Accounting for College Expenses - Student paid vs Parent Paid August 17, 2008, 1:47 pm
reporting tax-exempt interest April 17, 2006, 12:55 pm
Taxation of Tax-Exempt Alcohol August 24, 2008, 7:14 pm
tax exempt interest reported on 1099-INT January 27, 2007, 12:30 am

Contact Us | Privacy Policy
This site is not affiliated with Intuit - makers of Quickbooks and Quicken software
This site is not affiliated with Sage Software - makers of Peachtree accounting software
XML SitemapXML Sitemap