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So I've been making money from the US over the Internet, money that has been wiring from affiliate companies, PayPal, and Google to my home country. I never reported any taxes because of my non-US activities. Now I want to come and live in the US for a while, very likely, with all the income being deposited in a local bank account that I would open somewhere in California.

My question is, what should I expect with this whole new situation? What am I supposed to do exactly financial-wise?

I suppose I need to report and pay taxes as I'm conducting business on the American soil, right? If so, is there any good tutorial to start with, for a foreigner?

I currently have no idea what I should do with the income coming into my US bank account every month (approx. 10g/m). I tried to search online for advice but only to find them primarily for US citizens. As I'm a foreigner in US I suppose things are different. So I'm here for help. Any tips would be appreciated.

Update: My primary sources of income are as follows.

  1. Developing software and selling them to U.S. customers via Internet (download & membership subscription via PayPal).
  2. Brokering / introducing US customers to U.S. companies for sales commissions.
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+50

Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status.

The question is very unclear, since it is not mentioned whether your US sourced income "from the Internet" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not.

In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed.

You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas).

Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes.

  • +1 - Thanks for jumping in. And the combo of great detailed response including linked references and 'seek a pro' pretty much nails it. Will wait till tomorrow and then issue bounty. – JoeTaxpayer Feb 19 '14 at 18:27
  • My 2 sources of income: 1. Developing software and selling them to US customers via Internet. 2. Brokering / introducing US customers to US companies for sales commissions. – datasn.io Feb 20 '14 at 3:13
  • You're welcome. It's time to get some good answers to these unanswered questions. Glad to start with yours. – JoeTaxpayer Feb 20 '14 at 4:33
  • @kavoir.com both are likely to be taxable when you're doing it while on the US soil (regardless of your tax status), and #2 may even be taxable if you're out of the country (though I'm not sure about it). – littleadv Feb 20 '14 at 5:19
  • @littleadv I don't have a green card, so basically if I pass the substantial presence test, I will report and pay taxes just as how the native U.S. citizens are doing. Otherwise if I'm a non-resident alien, I'll just go with the instructions here. Correct? – datasn.io Feb 21 '14 at 12:02

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