How will i be taxed on income made overseas?

Question

I will be working in India for the next year. My company will pay all taxes enforced by the Indian goverment but I am unsure whether I will be taxed in the states or what the guidelines are for overseas income.

Answer 1

Best bet is to get a copy of IRS Pub 54 from the IRS website. You are subject to US taxation on your world-wide income from all sources regardless of where you live and work.

There are credits and exemptions that apply to US citizens and residents working overseas. You have a choice of either excluding up to $87,400 of your foreign earned income from US tax OR taking a credit against your US tax liability for the foreign income taxes paid. You can crunch the numbers both ways and file whichever way gives you the best benefit.