What is the first thing to sort out as a US citizen living in India?
Your residence position in India for the year, with the dates that support it. Everything downstream depends on it: which Indian income is taxed in India, how much Indian tax is imposed, and therefore what the credit on the US return can be. The second thing is the calendar. India works to a year ending in March and the United States to a calendar year, so the dates you arrived, changed jobs, bought or sold anything matter far more than they would in a single-country file. Before any form is opened we fix the residence position and build a dated timeline of the year from it.
Which return do I prepare first, the Indian one or the US one?
The Indian one, in almost every case, because the credit claimed on the US return depends on Indian tax actually imposed and paid, and that figure is not final until the Indian return is. Preparing the US return first means computing relief from numbers that later move, then amending. The exception is where something on the US side has to be decided before the Indian year closes — the treatment of an investment holding, for instance, or whether to realise something at all. In that case we form a US view early, act on it, and still complete the Indian return before the US filing is finalised.
What documents do I need to claim credit for Indian tax paid?
Evidence that the tax was imposed and that it was paid, capable of being read by month. For salary that means payslips and the annual statement of tax withheld by the employer. For investment income it means the statements showing what was credited and what was deducted at source. For a property or a business it means the Indian computation as filed. Because Indian tax for one Indian year covers months in two US years, dated records matter more than annual totals: an annual figure cannot be split reliably, and an unsplittable figure is credit that may not be usable in either US year.
Should I sort out my Indian investments before or after my first US filing?
Before, wherever a choice is still open. Indian investment products routinely fall into punitive US categories, and the US consequences attach to the year in which the holding existed and grew, not to the year you learned about them. Once a year has been filed on one footing, changing course is an amendment rather than a decision. So the starting work is an inventory of what you hold, a classification of each holding under US rules, and only then a view on what to keep. A client who does this in the first year usually never has to unwind anything; a client who does it in the fifth usually does.
Who has the first claim on my income, India or the United States?
For income arising in India and earned by a resident of India, India does in practice, and the United States reconciles the position on its own return. That ordering is what the treaty is for: it allocates the tax and prevents the same income being taxed twice, without removing either filing obligation. It is also why the order of work follows the order of claims. The reconciliation has to be evidenced rather than asserted, so the US return carries a computation showing the Indian income, the Indian tax on it and how that tax has been mapped onto the US measure of the same income.
Can an earlier US return be fixed if no Indian tax credit was claimed?
Often it can, and it is worth asking early because the amount involved is usually larger than people expect. The work starts with what was actually filed and when, then establishes what Indian tax was imposed for the months that US year covered, which is rarely the same as one Indian year. From there the question is whether that year is still open to correction and whether the credit for it can still be claimed. We answer those two questions before touching the current year, because the answer sometimes changes how the current year should be prepared.
Does hiring one remote employee in another country create a tax presence?
It can, on two separate fronts, and the second applies even when the first does not. A permanent establishment may arise if the employee has a fixed place of business there or concludes contracts for you. Independently of that, employing someone locally generally brings payroll registration, wage withholding and social security contributions in their country from the first payroll — obligations that do not wait for a permanent establishment finding. Contractor paperwork does not by itself avoid either. See remote work and tax exposure.
I work remotely from another country for a company back home — who taxes me?
Usually the country you are physically in, because employment income is generally sourced where the work is done, with your residence country taxing it as well if you are resident there and giving credit. Three things follow: your employer may acquire withholding and social security obligations where you sit, a treaty tie-breaker may be needed if both countries call you resident, and a short trip that becomes a long stay can cross a residence threshold nobody was watching. See remote workers and digital nomads.
