Category Archives: Small Business Tax

Small businesses have been misled into believing that “year-end” tax planning is their only choice.
This blog has hundreds of article on tax planning for both the international business and the domestic business.

International Tax Law for the Virtual computer and Robot

international tax planning, ecommerce tax planning, cloud computer tax planning, offshore tax planning,

international tax planning for eCommerce.

The U.K. Financial Times reports that in the UK, alone, robots will be replacing 15 million British workers.  In the U.S., we estimate 100 million workers.  The International tax law for the virtual computer and robot is new. 

The Newspaper’s article points out that lower paid workers are most at risks.  Well, we have seen this a the supermarket where the computer checkout is more attractive than the human ones.   

The virtual robot is the newest tool for business.  The other day, may cable company used a virtual robot to talk to me, diagnose the problem and fix by DVR.  Imagine the tax savings if that virtual robot was in a computer in the Bahamas. 

The international tax law for the virtual computer and robot require you to think outside of the brick and mortar world.

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Provocative International Tax Planning News for Small Business

A new U.S. Senate study reported that business with International Tax Planning are taxed at only 14%. The report explains why small businesses pay more than the legal share.  Here is why you will always pay too much in taxes.    This is the report that your international tax accountant needs to help you save taxes. 

International tax planning and strategy

Applying for an IRS ruling on your international tax planning will save you taxes in the long run.

Fantastic IRS International Gift Tax Plan

This IRS internal letter on this link. Fantastic legal tax avoidance for the foreign person with family in the U.S. is explained in this letter.

Amazing IRS Avoidance of  state income taxes  with this new IRS  designer  Nevada trust.  IRS tells how to use a Nevada trust to avoid state income taxes. Here’s what’s happeningon this link.   

New- Department of the Treasury letter to the U.K. tax authorities on U.S.  tax planning for UK and EU companies.  Here is the letter from the U.S. to the U.K. 

Be an IRS tax planning wizard with our new custom Google search, on this link.  This custom search reads 300,000 pages deep inside the IRS’s website and the tax court’s website.  It is free!.  Find the answers to your tax question quickly and accurately.

18th Century Supreme Court case destroys IRS tax penalty law. Using this case, the Tax Court gave the IRS a significant defeat.  Here is what happen.   The Supreme Court is the “Law of the Land.”  It rules over the IRS and Congress.   

It works both ways.  The blog on this link explains the  Supreme Court Doctrine used by the IRS to blow up an offshore life insurance plan.

offshore trust, foreign trust, nevada trust, estate planning trust, esbt,

Since the Middle Ages, the wealthy have capitalized on trusts to avoid paying taxes. During the Great Crusades, upon the death of a knight, his entire estate went to the king.    Nine hundred years later, things have not changed much except the ‘King” takes only half.

Trusts are the most efficient tax tool. International tax planning should start with a Nevada trust to own a  foreign company.  Learn trust tax planning and asset protection in this easy to read blog post.    It has the blueprint for successful trust tax planning.   Get the IRS memo on asset protection and tax planning with an offshore trust on this blog post.

internet tax planning, saving taxes, cloud tax planning

Saving taxes with the offshore cloud computer. 

Cloud tax planning. Learn how businesses are using the cloud to avoid taxes on this link. 

E-commerce companies are avoiding state income taxes and in some cases deferring U.S. taxes.

Here is how it works.  A computer service that can provide a service (such as a tax research program) or a product (such as music, e-books, video) has special sourcing rules.  The income can be foreign source income when the computer server in a foreign country. 

Is the U.S. a tax haven for citizens of the UK, Sweden, Belgium, Canada, Luxembourg, and Austria?  Yes, says the IRS in its Publication.  Learn the magic Tax Treaty words for these lucky citizens of The UK, Sweden, Belgium, Canada, Luxembourg, Austria on this link.

Five Best Tax Saving Plans For Small Business Owners

The new GOP tax laws start in 2018. Here are the Five Best Tax Saving Plans For Small Business Owners.  

Saving taxes will require some changes in your entity structure.  You want to focus on the low corporate income tax rate.  However, you need to keep certain assets out of corporations.  These assets are your trade name, trademark, copyrights and patents, if any.

Big Business uses many tax plans that are not well known.   The five best tax saving plans for small business owners are:  

 1.    Have one use the accrual basis of account.   This allows you to avoid taxes on prepayments  (more on this link) and expense costs before they are paid.   Have one entity be a corporation.    Corporations can be taxed as a separate entity (which means they pay their own taxes) or a pass through (by election subChapter S of the tax code).

Each of these corporate taxation methods has a unique advantage.   For a start-up, the separate entity has the benefit of allowing you be late on paying income tax on the profits.  Thus, you have more money to invest in growth.

Have one corporation doing business in a tax-free state such as Nevada.

2.  If you have only part-time employees or no employees, then fund your business  with the little-known tax savings of a solo 401K plan  (more on this link).  This works only if you have no full-time employees.  Big businesses use the ESOP retirement plan.  It is a fantastic tool but most small business can not afford the annual compliance cost.

3.  If you make sales via your website, place your website on a server in a tax-free state (learn more here) Also, have the server and website owned by a corporation in the same state.  If your website sells a service or another intangible item, use a tax haven corporation to own the site.  The server needs to be in the same country as the corporation.

4.  Use an irrevocable non-grantor trust to own any passthrough entities.   Of course, have the trust in a tax-free state such as  Nevada.   A non-grantor trust has almost no audit risks.  This type of a trust files its own tax return (Form 1041) and pay its own taxes.  By moving income to this return, you have a lower “adjusted gross income.”

A lower adjusted gross income allows you larger itemized deductions and more tax credits.  It also reduces your chances of a tax audit.

5.  Don’t rely upon year-end planning.  It is a suckers move.  Usually, you end up spending money to be able for a deduction.  Big Business plans a year in advance and not a month before year end.  Each time they add a product or service, they think about tax planning.   The most effective tax planning looks at income and not expenses.

If you need help creating a strategic tax plan, then contact me, Brian Dooley, CPA, MBT at [email protected]   A recent Government study showed that tax planning businesses are taxed at 14%.  For every one dollar spent in tax planning,  ten dollars are saved in taxes.

International Sale or License of Know-how and Intellectual Properties by or to a Foreign (Offshore) Corporation

Every business owns “know-how.”  Big business’s tax department exploits the tax characteristics of this unique and mysterious asset.  This blog is about the tax planning and tax savings of international sale license of know-how and intellectual properties.  

The Small Business International Tax planning for the Sale License of Know-how and Intellectual Properties

tax planning, avoid taxes, small tax business,

President John Kennedy (Democrat) is the most respected president of last century. The President and Supreme Court Justice Hand agreed that patriotism does not mean paying more than your legal share.
Supreme Court Justice Holmes said tax planning means you get as close to that legal line as possible

This blog is for small business wanting to save taxes.  This blog will provide the elementary concept of know-how.   International tax planning looks at the type of know-how. 

In the past, popular types are “practical know-how”,  “industrial know-how” and trade secret know-how.   But now, a new type exists. The setup of an websites, e-commerce internet systems and big data systems is cloud know-how (learn more on this link).

Know-how includes secret formula, secret process, trade secrets, business management, a website (especially an E-commerce website), inventory control, and 3D printing methods.   Know how is a type of intellectual property. 

In this article, the word “know-how” includes every type of intellectual property that does not have a patent, copyright, trade name, or trademark.

 When the sale of know-how is the sale of services related to another transaction, the income is ordinary income.   Capital gain is allowed when it is sold separately.

For example, Boeing sells 20 jet airliners.  The contract includes Boeing teaching the buyer how to repair and maintains the Jets. 

The tax character of this “know-how” sell is the same as the character of the sale of the Jets.  In this case, the character is ordinary income because Boeing is in the business of selling planes. The Jets are Boeing’s inventory.

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