Plano Cross-Border Tax

A Global Workforce

Plano's headquarters and technology firms employ people from around the world, and the city has large communities with roots in India, China, Korea and elsewhere. Families bring bank accounts, retirement savings, property and businesses in their home countries. BOMCAS prepares the U.S. side of these matters and has particular experience with Canada–U.S. tax.

Treaty and Canada–U.S. basics are on our Texas cross-border tax page. Plano's international families are the focus here.

Arrival Year and Residency

Workers arriving on H-1B, L-1 or other visas usually become U.S. residents under the substantial presence test. In the arrival year, they may file a dual-status return or elect to be treated as residents for the full year if married to a resident. The choice affects whether foreign income before arrival is taxed.

Indian Accounts and Investments

Common holdings for Indian families include NRE and NRO deposits, fixed deposits, PPF accounts, provident fund balances and Indian mutual funds. Interest and gains are reported in the U.S. even if tax-free in India. Indian mutual funds are usually passive foreign investment companies, which require Form 8621 and can produce punitive tax unless elections are made. Property sold in India is reported in the U.S., with a credit for Indian tax.

Korean and Other Transferees

Samsung's move and other corporate relocations bring transferees from Korea and other countries. Under the U.S.–Korea totalization agreement, employees sent here temporarily may remain covered by the Korean pension system instead of paying U.S. Social Security, with a certificate of coverage. Housing and cost-of-living allowances are generally taxable. Returning employees should plan for the exit year.

Canadian Transferees

Canadians moving to Plano for corporate roles become U.S. residents and file departure returns in Canada. RRSPs and RRIFs can usually keep deferral, while TFSAs and RESPs are taxable in the U.S. Canadian employers may pay part of compensation through Canadian payroll, which needs coordination to avoid double withholding.

Foreign Gifts and Inheritances

Gifts and inheritances from parents abroad are not taxed in the U.S. but must be reported on Form 3520 if over $100,000 in a year. Foreign trusts have more complex reporting.

Leaving the U.S.

Visa holders returning home file a final dual-status return. Green card holders who give up their status after many years may face exit tax rules. U.S. accounts and property kept after leaving have continuing filing duties.

Chinese Families

Families with ties to China commonly hold bank accounts, property and sometimes business interests there. Interest, rent and gains are reported in the U.S., with credits for Chinese tax. Large transfers from parents in China are reported on Form 3520 when over $100,000. Property sales in China can produce U.S. gain even when the Chinese tax is low.

Social Security for Indian Workers

The U.S. and India do not have a totalization agreement, so Indian H-1B workers pay U.S. Social Security but cannot combine credits with India's system. Those who leave before earning 40 quarters of coverage generally do not receive U.S. benefits. This affects long-term planning for families deciding whether to stay.

Foreign-Owned Plano Companies

Entrepreneurs abroad who form Plano LLCs or corporations must file Form 5472 to report transactions with foreign owners, even for single-member LLCs that otherwise file nothing. Missing or substantially incomplete filings carry a $25,000 penalty for each year, and a further $25,000 for every 30 days the failure continues more than 90 days after an IRS notice.

Common Filings

Dual-status returns and Form 1040-NR.
FBAR, Form 8938 and Form 8621.
Form 3520 for gifts and inheritances.
Form 8833 treaty statements.
Form 1116 foreign tax credits.