Figuring out if I receive US income?
I believe the answer is no, since your income from royalties and app sales would fall under FDAP income. (another conformation of this would be the fact that Apple and Google requested a W8-BEN form from you and not a W8-ECI form) Generally, All income EXCEPT FDAP income (fixed or determinable annual or periodical income) are ECI income.  FDAP income includes income from interest, rent, dividends etc. IRS link to a list of all Income classified under FDAP below:- https://www.irs.gov/individuals/international-taxpayers/fixed-determinable-annual-periodical-fdap-income https://www.irs.gov/pub/irs-pdf/iw8eci.pdf (page 3 - under effectively connected income)
If you earn money while in the US or from renting your US house - you have to pay taxes to the US on that income. If you become US tax resident - you have to pay US taxes on your worldwide income. Whether or not you're in the US illegally or receiving income while breaking any other law - doesn't matter at all. "Income is income... it depends how it's structured.. personal or corporate.. but still you need to pay taxes... if you get audited, the tax man could look at your bank statements and ask, ""where is this money coming from""" If you have income in the US, you will owe US income tax on it, unless there is a treaty with your country that says otherwise. "What would be the best strategy to avoid paying income taxes on the   sale after I move to another US state? Leaving the US and terminating your US residency before the sale closes. Otherwise consider checking your home country's tax treaty with the US. In any case, for proper tax planning you should employ a licensed tax adviser - an EA, CPA or an attorney licensed in your State (the one you'd be when the sale closes). No-one else is legally allowed to provide you tax advice on the matter. Because the company abroad is befriended, I have control over when   (and e.g. in how many chunks) the earnings of the sale flow into my   LLC. So I can plan where I live when that money hits my US account. I'm not familiar with the term ""befriended"" in this context, but form what I understand your description - its a shell corporation under your own control. This means that the transfer of money between the corporation and your LLC is of no consequence, you constructively received the money when the corporation got it, not the LLC. Your fundamental misunderstanding is that there's importance to when the money hits your US bank account. This is irrelevant. The US taxes your worldwide income, so it is taxed when you earn it, not when you transfer it into the country (as opposed to some other countries, for example India or the UK). As such, in your current scheme, it seems to me that you're breaking the US tax law. This is my personal impression, of course, get a professional advice from a licensed tax professional as I defined earlier." "I have a related issue, since I have some income which is large enough to matter and hard to predict. Start with a best guess. Check what tax bracket you were in last year and withhold that percentage of the expected non-withheld income. Adjust upward a bit, if desired, to reflect the fact that you're getting paid more at the new job. Adjust again, either up or down, to reflect whether you were over-withheld or under-withheld last year (whether the IRS owed you a refund or you had to send a check with your return). Repeat that process next year after next tax season, when you see how well your guess worked out. (You could try pre-calculating the entire tax return based on your expected income and then divide any underpayment into per-paycheck additional withholding... but I don't think it's worth the effort.) I don't worry about trying to get this exactly correct. I don't stress about lost interest if I've over-withheld a bit, and as long as your withholding was reasonably close and you have the cash float available to send them a check for the rest when it comes due, the IRS generally doesn't grumble if your withholding was a bit low.  (It would be really nice if the IRS paid us interest on over-withholding, to mirror the fact that they charge us interest if we're late in returning our forms. Oh well.) Despite all the stories, the IRS really is fairly reasonable; if you aren't deliberately trying to get away with something, the process is annoying but shouldn't be scary. The one time they mail-audited me, it was several thousand dollars in my favor; I'd forgotten to claim some investment losses, and their computers noticed the error. Though I still say the motto of the next revolution will be ""No taxation without proper instructions!""" "I'm working on similar problem space. There seems to be some working ambiguity in this space - most focus seems to be on more complex cases of income like Dividends and Capital Gains.  The US seems to take a position of ""where the work was performed"" not ""where the work was paid"" for purposes of the FEIE. See this link. The Foreign Tax Credit(FTC) is applied (regardless of FEIE) based on taxes paid in the other Country. In the event you take the FEIE, you need to exclude that from the income possible to claim on the FTC. i.e. (TOTAL WAGES(X) - Excluded Income) There is a weird caveat on TOTAL WAGES(X) that says you can only apply the FTC to foreign-sourced income which means that potentially we are liable for the on-US-soil income at crazy rates.  See this link.. Upon which... there is probably not a good answer short of writing your congressperson." "My employer decided to pay my salary in India after I submit a form W-8BEN. This means that the wages / salary is deemed accrued for work from India. Hence your employer need not withhold and pay taxes on this wage in US. Is this payment taxable in the States since I am staying outside of States? Should I declare this income to IRS in case if I go back to the States later this year? No tax is due as the work is done outside on US. If you go back this would be similar to as you had gone first. Depending on your ""tax residency status"" you would have to declare all assets. If my US employer wires my US salary to my NRE account is that taxable in India? This is still taxable in India. It is advised that you have the funds transferred into a regular savings account. Please note you have to pay taxes in advance as per prescribed due dates in Sept, Dec, March. how does the Indian tax man identify if it is a taxable income and not just the regular remittance. This question is off topic here. Whether income taxes finds out about this is irrelevant. By law one is required to pay taxes on income earned in India." Most countries tax income, but not a transfer of already taxed money, so you have nothing to worry about. You need to be prepared - if asked - to proof that the money was legally earned, and that you paid taxes for the income when you originally got it. Chances are small that anyone asks though, if you are not being investigated for other reasons already. The data provided in your question is irrelevant. The data that you provided in the comments (that you're physically present in the US while doing the work) is the only relevant information needed to answer your question. You will need to pay taxes in the US for the earnings. The company invoicing the US client will also need to pay taxes in the US for its earnings from these invoices. You can transfer between bank accounts and deposit whatever you want anywhere you want, no-one cares (with respect to the US taxes, check with Indian tax accountant about Indian requirements). "Am I eligible for declaring my earnings to the IRS? You're always eligible. You're probably asking whether you're required. In the US it doesn't matter where you deposit the money, it matters where you earn it. Money is earned where the services are provided. This is called ""sourcing"". So if you are working in a foreign country - you're only subject to the US laws to the extent you're a US citizen/permanent resident or qualify for the substantial presence test." "If a person is not a U.S. citizen and they live and work outside the U.S., then any income they make from a U.S. company or person for services provided does not qualify as ""U.S. Source income"" according to the IRS.  Therefore you wouldn't need to worry about withholding or providing tax forms for them for U.S. taxes.  See the IRS Publication 519 U.S. Tax Guide for Aliens." "The IRS W-8BEN form (PDF link), titled ""Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding"", certifies that you are not an American for tax purposes, so they won't withhold tax on your U.S. income. You're also to use W-8BEN to identify your country of residence and corresponding tax identification number for tax treaty purposes.  For instance, if you live in the U.K., which has a tax treaty with the U.S., your W-8BEN would indicate to the U.S. that you are not an American, and that your U.S. income is to be taxed by the U.K. instead of tax withheld in the U.S. I've filled in that form a couple of times when opening stock trading accounts here in Canada.  It was requested by the broker because in all likelihood I'd end up purchasing U.S.-listed stocks that would pay dividends.  The W-8BEN is needed in order to reduce the U.S. withholding taxes on those dividends. So I would say that the ad revenue provider is requesting you file one so they don't need to withhold full U.S. taxes on your ad revenue. Detailed instructions on the W-8BEN form are also available from the IRS: Instruction W-8BEN (PDF link). On the subject of ad revenue, Google also has some information about W8-BEN: Why can't I submit a W8-BEN form as an individual?" Follow the instructions on the W-4. It says exactly how you are supposed to calculate the number of allowances. You shouldn't have to figure out how to get the right number. Just follow the instructions. The only part at all complex is if you have large deductions. In that case you're supposed to subtract a standard amount from your actual deductions -- for 2017, $12,700 if married filing jointly -- divide by $4,050, and then add the result to the number of allowances. In general, following the instructions on the W-4 should result in slightly more tax being withheld from your paycheck than you actually owe, so that you get a modest refund next April 15. In the long run it doesn't matter if you have too much withheld, as you'll get it all back eventually anyway. I suppose the withholding could be so high that it doesn't leave you enough to live on while waiting for your refund, but that shouldn't normally be the case. If you pay too little, you could be subject to penalties and interest, so you really want to avoid that. "The decision whether this test is or is not met seems to be highly dependent on the specific situation of the employer and the employee.  I think that you won't find a lot of general references meeting your needs. There is such a thing as a ""private ruling letter,"" where individuals provide specific information about their situation and request the IRS to rule in advance on how the situation falls with respect to the tax law.  I don't know a lot about that process or what you need to do to qualify to get a private ruling.  I do know that anonymized versions of at least some of the rulings are published.  You might look for such rulings that are close to your situation. I did a quick search and found two that are somewhat related: As regards your situation, my (non-expert) understanding is that you will not pass in this case unless either (a) the employer specifies that you must live on the West Coast or you'll be fired, (b) the employer would refuse to provide space for you if you moved to Boston (or another company location), or (c) you can show that you could not possibly do your job out of Boston.  For (c), that might mean, for example, you need to make visits to client locations in SF on short-notice to meet business requirements.  If you are only physically needed in SF occasionally and with ""reasonable"" notice, I don't think you could make it under (c), although if the employer doesn't want to pay travel costs, then you might still make it under (a) in this case." "In the Income Statement that you've linked to, look for the line labeled ""Net Income"". That's followed by a line labeled ""Preferred Dividends"", which is followed by ""Income Available to Common Excl. Extra Items"" and ""Income Available to Common Incl. Extra Items"". Those last two are the ones to look at. The key is that these lines reflect income minus dividends paid to preferred stockholders (of which there are none here), and that's income that's available to ordinary shareholders, i.e., ""earnings for the common stock""."