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Filing your Income Tax Return – Important Points to Note

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February 2021

Filing income tax returns is an annual ritual that cannot be avoided. Many of you may have received the W2s and 1098 forms. Please pay attention to ensure that your taxes are filed correctly and in a timely manner.

Here are some important points to note.

»  File your taxes on or before April 15, 2021.  If you don’t have all the paperwork together then you may file an extension for 6 months.  However, if you think you owe money please pay it now so that you are not charged penalties and interest later.
»  If you have a simple tax return then you may file it on via the IRS website – See link below:
»  You also need to file State tax returns. If you lived in multiple States then please take that into account as well.
»  You are liable to file tax returns regardless of your visa status.
»  If you hire a tax preparer then make sure that you provide all the information to the preparer. 
»  Tax laws changed last year. It always helps to seek expert advice.
»  You are liable to report all worldwide income including interest/dividend income in India.
»  If you sold property in India then you have to report the capital gains. However, you will not be double taxed. It is a complicated area. It is best to seek professional help.
»  Also, if you have $10,000 or higher in a foreign bank at any time during the year you MUST file FBAR report.  This is done separately and not part of the tax return.  Please don’t miss doing this.  USA has access to your India bank data. The due date for filing the FBAR is the same time a person’s tax return is due. So for individuals in the United States, the due date for filing the 2020 FBAR is April 15, 2021. But, the FBAR is an automatic extension and therefore filers have until October 15 to file their FBAR. Here is the link BSA E-Filing System - Welcome to the BSA E-Filing System (treas.gov)
»  If you own a business or complex transactions, then it is best to hire professional help.

Please take this responsibility seriously.  Penalties are severe if you file false tax returns. 
 
It is advisable to seek professional help because the tax laws keep changing. Here is a list of Accountants and Tax preparers. Some of them are aware of Indian tax laws also. Discuss with them and select accordingly. Click here for the listing.

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