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I recently resigned from a US company and moved back to India on 5/31/2019 (I was on my H1b). I submitted my resignation letter already. I will be going back to school for a Ph.D. in the fall and my VISA interview is scheduled for 06/24/2019.

In the meantime, I found a new opportunity to work for a different US company as an independent consultant while I am in India. Is this legal for me to do so? How do I handle my taxes in that case ? I pass the US IRS's substantial presence test so I am a US tax resident. Should I ask the company to withhold my taxes?

Thank you

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  • Why does an Indian national in India even pay US taxes?
    – RonJohn
    Commented Jun 19, 2019 at 16:30
  • @RonJohn - I'm inferring a bit here, but it sounds like it's because they lived and worked in the US for a portion of the year. See: irs.gov/individuals/international-taxpayers/…
    – dwizum
    Commented Jun 19, 2019 at 16:59

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"Independent consultant" usually implies that you're not a direct employee. The IRS describes the difference for tax purposes in an article on their website.

Assuming the company you're working for is considering you self-employed, they will report your wages via 1099-MISC (used for independent contractors, based on you providing them a completed W9), not on a W2 (used for employees, and based on you completing a W4). This means they will not withhold taxes for you, and you have the burden of determining your taxes and ensuring that you're paying them timely (which may mean submitting quarterly payments, or paying when you file your return). The IRS has an overview of self employment tax topics in another article on their website.

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  • Thank you for your response!!! I was trying to make sure I was doing everything that's legally required of me since I don't want to jeopardize any future visa applications. I just realized that since I was a student from 2014 to Feb 9th this year, and I left my H1b job after only 3 months. I haven't accrued 183 days nonexempt days required for Substantial Presence Test. So I am guessing I don't have to pay tax in the US for my income as an independent contractor and will have to just file my taxes in India. Am I correct in assuming this ?
    – Manvitha Reddy
    Commented Jun 19, 2019 at 17:10
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    In your question you said, "I pass the US IRS's substantial presence test so I am a US tax resident. " but now you're saying you don't think you've met the criteria. You may want to consult with a tax accountant who can review your case in detail and give you professional advice.
    – dwizum
    Commented Jun 19, 2019 at 17:14

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