Which IRS Tax Forms Do NRIs Commonly Miss When Filing in the USA?

Apart from these, there are a few other forms that may apply if you have more complicated financial arrangements in India.

• Form 8858: May apply if you own certain foreign disregarded entities or operate a foreign branch.
• Form 8865: May apply if you have certain ownership interests or transactions involving a foreign partnership.
• Form 926: May apply when you transfer certain property to a foreign corporation.
• Form 1116: Used by eligible individuals to claim a foreign tax credit for qualifying income taxes paid to India.

I would also check Schedule B of Form 1040. It includes questions about foreign financial accounts and foreign trusts. Answering these questions does not replace separate FBAR or other required information returns.

One thing to remember is that your Indian citizenship or NRI status alone does not determine which US forms you must file. Your US tax residency, account ownership, investment type, asset values and transactions during the year all matter.

The IRS has a useful overview of international reporting requirements for US citizens and resident aliens.

Indian mutual funds are another area worth checking carefully.

A US taxpayer who owns shares in an Indian mutual fund may have a Passive Foreign Investment Company (PFIC) reporting obligation.

This can require Form 8621, depending on the fund's classification and the taxpayer's ownership and reporting circumstances.

The important point is that Indian mutual funds are not automatically treated like US mutual funds for US tax purposes. Their tax treatment can be complicated, particularly when calculating distributions, gains and possible PFIC tax.

Other forms may apply depending on your assets and family transactions:

• Form 3520: Certain transactions with foreign trusts and certain large gifts or bequests received from foreign persons.
• Form 3520-A: Generally relevant when a US person is treated as an owner of a foreign trust.
• Form 5471: Applies to certain US persons who are officers, directors or shareholders of specified foreign corporations.

For example, receiving a large gift from parents in India may create a Form 3520 reporting requirement even if the gift itself is not taxable income.

These forms have different filing rules, so I would not assume that every Indian investment or family transfer requires all of them.

The first two reports I would check are FBAR (FinCEN Form 114) and IRS Form 8938. Many people assume they are the same requirement, but they are separate filings.

• FBAR (FinCEN Form 114): Generally required when the combined maximum value of reportable foreign financial accounts exceeds $10,000 at any time during the calendar year.
• Form 8938: Reports specified foreign financial assets when their value exceeds the applicable reporting threshold. For someone living in the US, the general thresholds for unmarried taxpayers are more than $50,000 on the last day of the tax year or more than $75,000 at any time during the year. Higher thresholds apply to married taxpayers filing jointly.

For example, if you have NRE and NRO accounts, Indian fixed deposits and eligible foreign investment accounts, you should check both requirements.

Some accounts may need to be reported on both forms. Filing Form 8938 does not replace FBAR, and filing FBAR does not replace Form 8938.

Also, FBAR is submitted electronically to FinCEN, not attached to Form 1040.