International taxation · Taxes

How do you operate US Tax system for an immigrant who runs a business in another country?

Sanil Bose Founder Ayruz DataMarketing, 11 years of Entrepreneurship experience in Digital & Analytics

June 6th, 2016

I am immigrating to the US in July 2016. I run a moderately successful digital marketing and analytics business in India. Our primary customers are based in the UK. I earn my salary in Indian currency at the minute, but when I move to the US I am going to get paid in USD. The salary will be wire transferred from India to my US bank account.

Can someone please explain how would I pay the taxes in the US? I intend to establish my business in the US later end of this year. But for the time being I will be employed to my business which is operated in India. What are the procedures to pay tax in my scenario? If I am correct there is W2 form that employer has to issue to file IRS. Since I am employed by a foreign company that does not have a legal entity how would I pay the taxes and arrange w2 forms etc?

Tanya Bourque

June 6th, 2016

I would get an accountant to help you. There is software that makes it easy. My company has decided to go with Xero.com which is pretty good. If you are employee, taxes would come out of check each pay period. At the end of the year you will receive a W2 to file your taxes. If you are living in the US, you will need file US taxes. A good accountant is what you need. I can recommend a few in the Philadelphia area. I believe we are connected on LinkedIn.

Melissa Powell

June 6th, 2016

Great! Definitely don't rush. Just get clear on the dual taxes with accountant. 

Sanil Bose Founder Ayruz DataMarketing, 11 years of Entrepreneurship experience in Digital & Analytics

June 6th, 2016

Thank you Melissa. I am going to be a green card holder. I plan to continue sending money to Indian company for sometime. I also don't want to rush company incorporation in the US. I am not familiar with the US market much. 

Sanil Bose Founder Ayruz DataMarketing, 11 years of Entrepreneurship experience in Digital & Analytics

June 6th, 2016

Thank you Tanya. Yes we are connected in LinkedIn.

Melissa Powell

June 6th, 2016

Hi Sanil,

I agree with Tanya about finding a good accountant. The most important thing to do is make sure there is a clear track of everything. So make sure you take the time to set up clear simple accounting from the get go. In terms of an accountant, you should see if you can find one that is familiar with global accounting, or at the very least accounting in both India and the US, as they will need to be familiar with both tax systems in order for you or your company not to have problems with either governments, and also for you not to be double taxed.

To simplify things in terms of customers in the UK I would suggest either having them continue pay directly to India or move to US Business account when you are set up (the sooner the US is set up and money is coming in, it may also benefit your immigration status depending on how you are entering the US). Introducing a third currency and account will further complicate things.

Definitely get that accountant sooner that later as it may be a lot more complicated than just figuring out which form is needed. It's worth it to just get set up properly on all fronts from the get go. It usually isn't that expensive to get them to help you set up and then you can manage it on your own.

Best of Luck!