After consulting HR Block, are you actually obligated to file your taxes with them, if they've found ways to save you money?
The obligation is contractual, so you need to read the contract to answer your question. However, since you paid for the service provided, I see no way they can force you buy any other service from them. They cannot file your tax returns without your explicit consent (on a form dedicated to that, dated and having the numbers matching the return filed - not something you can sign before the actual return is ready). Worst case they can claim you owe them more money, but since you paid for the services provided, I can't see how they can have that stand in court as well. Bottom line - even if the contract has such an obligation, I cannot see how it can be enforced. As to the mistake they noted... I wouldn't rely on H&R Block advice in any matter. Very likely, the person you were talking to was not even licensed to provide tax advice. You're lucky if the person has passed CRTP exams (in California they're legally required), but I seriously doubt their clerks are EAs or CPAs (the only designations other than a lawyer legally allowed to provide tax advice). Tax preparers (CRTPs included) are only allowed to provide advice pertaining to the preparation of the tax return they're currently engaged to prepare. Claiming income is sourced or not sourced in NY is borderline, IMHO. If they got it wrong (and to me it sounds as they did) you can sue them for damages. If your situation is tricky and it is too late to get an appointment with a proper adviser - file an extension (form 4868) and deal with it after the April busy season. "This is a legal issue, or possibly an ethical issue, and not really a finance issue. And I am not a lawyer. But for what it's worth: Did you sign a written contract with H&R Block? If so, then the terms of that contract would govern. If you signed a contract saying that you agree to file your taxes through them if they meet such-and-such conditions, and they met these conditions, then you are legally obligated. If there was no written contract, then I think any court would take the conversation between you and H&R Block as an oral contract. If H&R Block said, basically, ""Okay, we'll calculate what we think your taxes are, and if we come up with something better than what you had before, then you agree to file your taxes through us"", and you said ""Oh, okay"", then that's an oral contract. You agreed to their conditions. Legally, oral contracts are just as binding as written contracts. The only difference is that it is difficult to prove exactly what was said. If you really did agree to these conditions, I suppose you could lie and say you didn't and then try to convince a court that they are the ones lying. Obvious ethical problems there. There are also implied contracts. If HRB's advertising or paperwork says that you're agreeing to file through them if they meet the conditions, I thing that a court would likely rule that you implicitly agreed to their terms by doing the review. In any case, when you go to some place like HRB mostly what you are paying for is their knowledge and expertise. So if they give you the benefit of their expertise -- they tell you how to reduce your taxes -- and then you don't pay them, that seems rather unethical to me. The situation is muddied by the fact that you paid $100 for the review. Is that paying for the basic information, the ""tax tip"", and paying for them to file is then a contract for additional work? Under some circumstances I'd say yes, that's additional work and thus an additional contract, so in the absence of a contract obligating me, I don't have to do that. The catch in this case is that at that point they must have already pretty much taken all your information and filled out all the forms. All that's left is to press the ""send"" button and submit the return, right?" It sounds like they want to enter you into a contract in which they are allowed to charge a flat fee for filing contingent on money saving results from a tax review service, paid in full. Like those who answered before I have no legal experience.  IRS Circular 230 defines the ethics for tax practitioners and the definition of a tax practitioner is broad enough (effective Aug 2011) to include those who are not EAs, CTRPs, CPAs as long as the person is compensated to prepare or assist in a substantial part of the preparation of a document pertaining to a taxpayer's liability for submission to the IRS. Section 10.27 Fees: (b)(2)A practitioner may charge a contingent  fee for services rendered in connection with the  Service’s examination of, or challenge to — (i) An original tax return Paragraph c defines what a contingent fee is basically a fee that depends on the specific result attained, in this case saving you money. In the section above  'Service's examination'  is an audit in plain speak.  If your 2013 return has not been submitted and you have not received a written notice for examination, H&R block can not charge a contingent fee, period. Furthermore, H&R Block cannot hold your tax documents, upon your request, they must return all original tax documents like W2s and 1099s ( they don't have to return the tax forms an employee prepared). Like I said above, I'm not a lawyer, unless I missed a key detail, I don't believe they were permitted to charge you a filing fee contingent on saving you money. As I have worked for H&R Block I know for a fact that they record all your activity with them for future reference. If it is their opinion that you are obligated to use their service if you use some other service then this, most likely, will affect your future dealings with them.  So, ask yourself this question: is reducing their income from you this year worth never being able to deal with them again in future years? The answer to that will give you the answer to your question.
"Yes, it will be taxable in the US. You will report your worldwide income, and will be able to take credit for any Indian tax paid. However, the portions that are tax-free in India will be fully taxable for you in the US. Keep in mind, in addition to the taxes, the FBAR requirements and the FATCA forms you may need to be filing as well. Failure to file (regardless of if any tax is actually owed) will trigger a $10K penalty. I suggest you have a US-licensed EA/CPA (tax adviser) to help you with your US tax return. Keep in mind that a ""regular"" American tax preparer knows very little of the specific requirements for foreigners and may land you in trouble. Similarly, the ""off-the-shelf"" tax software or tax preparation outlets (like H&R Block) are ill-suited for foreigners in the US. It would be best to talk to a EA/CPA who is also familiar with Indian financial terms and Indo-US tax treaty." "There is actually a restriction on how high a wage they can pay you. There didn't use to be, but now it has to be reasonable for the work you are doing, so they can't pay you $100/hr while other people doing the same work get minimum wage. You might ask why on earth a parent would want to pay a child way more than they're worth? The salary is tax deductible to the company. Then the child pays their ""expenses"" - hockey fees and equipment, field trips, birthday presents for their friends and so on - out of the money the company paid them.  They also save for their post-secondary education. The rest of the family budget now has a little more room, and the parents can lower their own salaries if they have expensive children. This means more net money in the company and less total income tax paid by the family for the same total income. My concern is that if your parents don't know whether or not you must be paid minimum wage (you must, there's no family exemption) then they also don't know whether you should have EI deducted (probably not) and various other special cases like eligibility for summer student subsidies. The firm's accountant should be able to help with these things and the company should know all this. It's not the role of a 14 year old to ask the Internet how to run a business, the business owners should know it." "The Dutch tax office is pretty decent, although slightly overburdened. Don't expect a lot of help, but they're not generally known for making a lot of problems. Digital copies are fine, for instance. They will send you your first VAT notice. You probably would have known if your company would have been incorporated, so I'll assume you're just trading as a natural person. That means you still have to file VAT returns, but the business income is just filed annually as ""other income"".  For the VAT part, you'll need to invoice your customers. Keep a copy of those invoices for your own bookkeeping, and keep track of the matching customer payments. Together these form the chief evidence of your VAT obligation. You also have a VAT deduction from your purchases (it's a Value-Added Tax, after all). Again, keep receipts. The usual VAT period is 3 months, so you'd pay VAT 4 times a year. But if you would pay less than 1883 euro, you might not need to pay at all and just need to file annually The income part is easy with the receipts you had for VAT purposes anyway. Dutch Tax Office, VAT, in English" Your employer pays the expected (but estimated) taxes for you. So the chances are you don't own more; but that might be different if you have other sources of income that he doesn't know about (interest on savings or a side-job or whatever). Also, you could have deductions that reduce the taxes you owe, which he again doesn't know, so you overpay. If you don't file, you don't get them back. Most tax software companies offer free usage of their tool for standard filings, and you can use it to find out your tax situation, and then buy the tool only when you want to file. If you use one of those, you can type in all your data, and depending on the result, decide to buy it and file right away. Note that if it turns out you owe taxes, you must file (and pay), but of course you can do it manually instead of buying the tool. If it turns out you get money back, it is your decision to file - you probably don't care for a small amount, but if you get 1000 $ back, you might want to file - again, buying the software of doing it manually. "Whether you do decide to go with a tax advisor or not, be sure to do some research on your own. When we moved to the US about 5 years ago, I did find the taxes here pretty complicated and confusing.  I went ahead and read up all different tax documents and did some calculations of my own before hiring a CPA (at that point, I just wanted a second opinion to make sure I got the calculations right). However, when the office of the CPA was finished with my taxes, I found they had made a mistake! When I went back to their office to point it out, the lady just shrugged, corrected her numbers on the form and said ""You seem to know a lot about this stuff already. Why are you here?"" I swore to never use them again - not this particular CPA at least. Now, I am not saying all CPAs are the same - some of them are pretty darn good at their job and know what they are doing. All I am saying is it helps to be prepared and know some basic stuff. Just don't go in all blind.  After all, they are also humans prone to mistakes and your taxes are your liability in the end.  My suggestion is to start with a good tool that supports tax filing for non-residents. Most of them provide a step-by-step QA based tool. As you go through the steps, Google each question you don't understand. It may take more time than hiring a tax advisor directly but in the end it will all be worth it." Nope not gonna do it.  Every single person tries to reduce their tax burden, so when a company does it suddenly they are bad.  Get real.  Plenty of companies, liberal loving and conservative companies alike.  Good for them. She filed for 0 withholdings in her W4, so my (unprofessional) guess   was that she'd be owed money, and therefore the IRS wouldn't care much   if she didn't file her taxes.† Maybe, but doesn't she want that money back? Is she at as much risk as any other individual of being audited and   penalized to the same degree if she skips filing her taxes? Audited and penalized are not the same. She's at the same risk of being audited, and even slightly higher since the IRS got reports of her wages, but didn't get the matching report from her. They may want to ask why. But it doesn't mean she's going to be penalized for anything. Being audited doesn't mean you did something wrong. Or does the IRS tend to overlook such individuals. The IRS might want to overlook because they're the ones owning money. She cannot get a refund without filing a tax return. She'd file her taxes today if she could, but the worry is that time's   running out Filing an extension is free and it postpones the deadline to file till OCTOBER! "In a word, no. If your income is high enough to have to file a return, you have to file a return. My accountant has a nice mindset for making it more palatable. I'll paraphrase: ""Our tax system is ludicrously complicated. As a result, it is your duty as an American to seek out and take advantage of every deduction and credit available to you. If our politicians and leaders put it into the tax code, use it to your advantage."" A friend of mine got a free golf cart that way. It was a crazy combination of credits and loopholes for electric vehicles. That loophole has been closed, and some would say it's a great example of him exercising his patriotic duty."