The terms, in plain English

Closer connection exception (Form 8840)

Lets someone who passes the day-count test but was in the US fewer than 183 days stay a non-resident, if their tax home and closer connection are in another country. Not available if you have applied for a green card. Are you a US tax resident?

CP2000

An IRS notice saying that third-party reports of your income do not match your return and proposing a change. It is not a bill, but it needs a timely response. IRS letters

DTAA (India-US tax treaty)

The double tax avoidance agreement between India and the US. It allocates taxing rights and provides relief, but US citizens remain taxable in the US on worldwide income under its saving clause. Citizens of Indian origin

Dual-status year

A year in which you are a US non-resident for part of the year and a resident for the rest, usually the year you arrive or leave. It has its own return, with limits on deductions and filing status. Dual-status year

Estimated tax (Form 1040-ES)

Tax paid in instalments through the year on income with no withholding, such as self-employment income, rent or gains. Paying too little can bring a penalty. Withholding and estimated tax

Exit tax

A tax on certain long-term green card holders and US citizens who give up their status, based on a deemed sale of worldwide assets. Moving back to India

FBAR (FinCEN Form 114)

A report of foreign bank and financial accounts, required when your foreign accounts together exceed $10,000 at any time in the year. It is filed with FinCEN, separately from the tax return. FBAR and Form 8938

FIRPTA (Form 8288-B)

A withholding rule on sales of US real estate by foreign persons, generally 15% of the sale price. A withholding certificate on Form 8288-B can reduce it. Selling your US home

Foreign earned income exclusion (Form 2555)

Lets a US citizen or resident living abroad exclude a capped amount of earned income from US tax, if they meet a bona fide residence or physical presence test. It does not cover interest, rent or gains. Do I need to file?

Foreign tax credit (Form 1116)

A credit against US tax for income tax paid to another country on the same income, limited to the US tax on that income. It is how Indian tax paid is set against the US bill. Foreign tax credit and the treaty

Form 1040 and Form 1040-NR

Form 1040 is the return for US citizens and residents. Form 1040-NR is the return for non-resident aliens, who are taxed mainly on US-source income. Are you a US tax resident?

Form 3520

A report of foreign gifts above a threshold and of transactions with foreign trusts. Relevant to large gifts and inheritances from family in India. Gifts and inheritance from India

Form 8843

A statement filed by students and certain other exempt individuals to show that their days in the US are not counted towards residency. It carries no tax and is filed even with no income. From F-1 to H-1B

Form 8938

A statement of specified foreign financial assets attached to your return when the total passes a threshold that depends on your filing status and where you live. It overlaps with the FBAR but is a separate duty. FBAR and Form 8938

Form 8949 and Schedule D

The forms on which sales of shares and other capital assets are listed, and the gain or loss totalled. A 1099-B from a broker feeds into them. Selling shares: Form 8949

Green card test

You are a US tax resident from the first day you are in the US as a lawful permanent resident, until the status is formally ended. Are you a US tax resident?

ITIN (Individual Taxpayer Identification Number)

A tax-filing number issued by the IRS to people who need one but cannot get an SSN. It does not authorise work and does not qualify the holder for Social Security or the Earned Income Tax Credit. ITIN or SSN

NRE, NRO and FCNR accounts

Indian bank accounts for non-residents. NRE and FCNR interest is tax-free in India but taxable in the US. NRO interest is taxable in India, with tax deducted at source. NRE and NRO interest

OCI (Overseas Citizen of India)

A lifelong visa-type status for foreign citizens of Indian origin. It is not Indian citizenship, and it does not itself decide your Indian tax status. Citizens of Indian origin

OPT and H-4 EAD

Work permissions linked to US immigration status: Optional Practical Training for students, and an Employment Authorization Document for certain H-4 spouses. Whether you may freelance depends on them. Freelancing on the side

PFIC (Passive foreign investment company)

A foreign company or fund that mostly earns passive income or holds passive assets. Indian mutual funds are usually PFICs and face punitive US tax rules and Form 8621 reporting. Indian shares and mutual funds

RNOR (Resident but not ordinarily resident)

An Indian tax status, often applying for a few years after returning to India, under which only Indian-source income is generally taxed in India. Citizens of Indian origin

RSU and ESPP

Restricted stock units and employee stock purchase plans, two common forms of employer equity. Both create taxable income and a cost basis that brokers often report wrongly. RSUs, ESPP and options

Schedule E

The schedule on which rental income and expenses are reported, including rent from property in India. Rent from a house in India

SSN (Social Security number)

The number issued by the Social Security Administration, mainly to citizens and to non-citizens with permission to work. Several credits require one. ITIN or SSN

Substantial presence test

A day-count test that makes you a US tax resident: at least 31 days this year and 183 weighted days over this year and the two before it (all of this year, a third of last year, a sixth of the year before). Residency calculator

TDS (Tax deducted at source)

Indian tax withheld by the payer, such as a bank, tenant or buyer, before money reaches a non-resident. It can be claimed as a credit in India and, within limits, in the US. Foreign tax credit

General definitions, not tax advice. Rules and thresholds change, and the guides carry the detail and the date each was checked.