Tag Archives: cloud tax planning

Cloud Continues to Disrupt Business – 1,000s of Robots Laid Off

International tax planning compares last century's tax laws to this century's business. Then , it exploits the differences.

International tax planning compares last Century’s tax laws to this Century’s business. Then, it exploits the differences.

Using your knowledge the 1990s and the beginning of this Century will cause you to pay more in taxes and it can put you out of business.

You have to compete with the future. Blockbuster’s demise is old news from the beginning of this century.   Just ten years later, the killer of Blockbuster is dying.   Redbox has closed (laid off) 1,000s of it robotic DVD rental kiosks in the U.S.

 In 2015, it closed all of its DVD rental kiosks in Canada.   Netflix and other video streamers are slaying the king of the DVD rental kiosks. Redbox’s $1 a night became too expensive. Netflix is $10 a month, and you can watch as many hours as you want with 50,000 choices.   With Redbox, you had to rush to the kiosks to return the DVD.

American international tax laws were written and were designed for a 1930 economy.

Offshore tax planning compares the out of date concepts in our tax laws to 21st Century business. Then, it exploits the differences.  Your tax planner must forget last century’s tax planning and learn this century’s.  Even the first ten years of this century is partly obsolete.  

If this was 2005, you would not have a smartphone. Yep, no apps.  I don’t know about you, but I use my iPhone and iPad for business more than I use my landline and my computer combined.   

Great tax planning sees the trends and changes.

With the iPhone came the  streaming of music.  If the computer server hosting the music was located in the Cayman Islands, the income would be foreign source income and not U.S. source regardless of the location of the customer.

Look at banking.   Are ATM’s the next to be laid off?  Do you want to deposit your checks like this,  in the dark watching over your shoulder?

Internet businesses can decide who is going to tax them just by using the cloud.

Internet businesses can decide who is going to tax them just by using the cloud.

Or like this- At home with a smartphone app where it is safe. By changing your business, you not only survive, but you can also completely shift your tax profile.

For example, if you distribute a product, spend some time learning about 3D printing or using a fulfillment center.   If you have an e-commerce business,  consider streaming your product versus providing a mp3 file or a pdf file.  Internet tax planning starts with shifting the source of the income.

For some, it is merely a move to Nevada or Texas to escape California or New York taxation.  For others, it is outside of the U.S., such as Canada (yes, it is an internet tax haven) or Ireland.  By the way, California tax planning and New York tax planning just became more important.  State income taxes are no longer deductible. 

If you want to brainstorm your idea and dream about your future, then call me, Brian Dooley, CPA, MBT, at 949-939-3414 for a free one-hour consultation with you and your CPA,

21st Century Tax Planning and Strategy for E-commerce and the Internet Cloud Business

Using last Century's infrastructure is fatal to you business. Using last Century's tax strategy is also fatal to your business.

Using last Century’s infrastructure is fatal to you business. Using last Century’s tax strategy is also fatal to your business.

British Air announced that its worldwide computers are down, again.  Is your small business tax planning like BA’s  XP style computer?

Here is the problem with small business tax planning.  Your CPA is using the same tax plan as when your computer used Window’s XP.  You have updated your infrastructure for your business but not your tax plan.  Business in 2016 is nothing like in 1998.

Congress reported that U.S. business that legitimately plan their taxes have a 14% tax rate.  And there is more.  Half of those business paid legally paid no tax.
My question to you: “Are you paying more than your fair share in taxes?”

Here are four indicators that your CPA is stuck in the 1900’s XP tax planning:

  1.  He does year-end tax planning.  Great tax planning is designed for years in advance focusing on each of your sources of income.
  2. He talks about deducting the cost of new equipment as if he has saved you money.  Spending money on new equipment is not a tax plan.  It is money lost unless you need the equipment. Then, it is an investment in growth and not a tax plan.
  3. He has you in an IRA plan.   Present value math models show that a 401K plan does not save taxes.  IRA plans dramatically increases your taxable income after age 70 causing a net after-tax loss.
  4. He never mentions a Nevada trust.   Not only does a Nevada trust eliminate income taxes, but it also protects your assets (just in case we have another Great Recession).

Internet web-based and e-commerce businesses are saving taxes by using the internet to shift income to a low tax state or even a tax haven.  Spend six minutes and listen to first few chapters of my book, below, to learn how the cloud-based and e-commerce businesses are paying less in taxes.

Internet marketing businesses and app companies can quickly shift their income to a no tax state, such as Nevada, or a no tax e-commerce country such as Canada.

How to Start a Business in the United Kingdom Headquartered in London

England is a great place to start the internet or cloud-based business such E-commerce or another web app.

With the exit from the European Union, Britain has been able to have its own tax policy.  The U.K. plans to reduce its corporate tax rate from 20% to 17%.   Unlike the U.S., the U.K. does not have a state income tax.

E-commerce and other cloud-based business have a special tax planning advantage by being in the U.K.   The can provide their web-based products with little or no European tax.  In some cases, they can avoid U.S. income taxes, too.

Here is the best business and tax structure for an Ameican doing business in the United Kingdom.

United Kingdom claims U.S. LLC is a tax haven company

The United Kingdom is beating America as the better business country

The first goal of a business structure is to protect the owner’s assets.  At the end of the 1800s, corporations were invented.   Corporations exist only because a government allows them.  Capitalist need corporations to take a limited amount of risk.

The problem for Americans is that we are starting to use limited liability companies.   U.K. courts may not accept an American LLC as an entity that protects the LLC’s owner from the LLC’s debts.

Thus, a corporation is my favorite choice for doing business in the U.K.  If you use an American corporation, you have a choice of being taxed under two different parts of the U.S. tax laws.

In the U.K., you have no choice.  The corporation pays the U.K. tax.  For tax planning, I prefer the U.S. corporation to open a branch in the U.K.

A U.K. Branch allows for large tax saving because of the “foreign tax credit” and the U.K. Tax Treaty.

Your U.S. income tax is reduced by the income tax paid by the corporation to the United Kingdom.  In effect, you get a full refund for the foreign income taxes.

Another choice is to create a U.K. corporation.   The advantage is a deferral of U.S. income taxes on your foreign (U.K. or EU) profits.     However, there is a tax cost.  You will not be allowed the foreign tax credit for the foreign income taxes paid by the U.K. company. `

The other issue of a U.K. company is the cost of filing an IRS information return.  This return is Form 5471.  The Form is complicated because of the many tax saving elections that you can make.    While the cost of this return is about $5,000, the tax savings are in the $10,000s of thousands.

If you need help in deciding which business entity is best or in preparing the Form 5471, then please, give me, Brian Dooley, CPA, MBT a call at 949-939-3414.

Saving Taxes – In the E-commerce & the Cloud (Virtual) Computer World

cloud computer tax, tax planning, saving taxes, international tax planning,

E-commerce businesses are saving taxes with cloud computer tax planning.

Saving taxes in this century’s cross-border business environment is easier than ever.  Small businesses are saving taxes with eCommerce tax planning and cloud computer tax planning.  

The cloud has level the playing field between small business and big business.  Amazon is leading the way.  At the bottom of this blog are my Amazon favorites.  Small businesses can benefit from cloud computer tax planning.  

Cloud tax planning allows big state and federal tax savings.  A popular term for this is “third wave” tax planning.
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The Best International Taxation Planning Audiobook and Kindle for the Entrepreneur

Chairman Robert Lee Doughton of the Congressional House Ways and Means wrote today's tax laws. , This Civil War baby wrote today's tax law. High school educated in the 1870s!

Chairman Robert Lee Doughton of the Congressional House Ways and Means wrote today’s tax laws. , This Civil War baby wrote today’s tax law. High school educated in the 1870s!

Just how good is Congress doing?.  Today’s tax laws follow the blueprint designed by this man, named after General Robert E. Lee.   Born in the 1860s, his view of the World is in today’s tax laws.  Text messaging was via the Telegraph.

His ancient concepts have created legal loopholes for the cloud based business,  E-commerce small business, and the business selling merchandise without the need for inventory.

Take a three-minute test drive of the audiobook below, at the end of this article.    

For example, did you know that by placing having a British Virgin Island corporation own your website, you may reduce or eliminate U.S. taxation?  You will learn how this is done in my book.

The audiobook edition of  International Taxation in America for the Entrepreneur,  available at Amazon on this link along with the paper and Kindle versions. My Book that is changing tax planning for the E-commerce and cloud-based business.  Easy to read in less than two hours.  Learn our tried and true innovative tax plans with my book,

Myths that restrict your offshore tax planning include:
1. Income deposited into a foreign bank account is foreign source income. Place of bank deposit does not determine so the source of income.  Deposits into U.S. banks can still be foreign income and deposits in a foreign bank can be U.S. taxable income. 

2.The “Dutch Sandwich” helps U.S. firms avoid U.S. taxes.  This ancient tax treaty plan is used to prevent European tax.  E-commerce and cloud base businesses do not need to use tax treaties to avoid taxes.
3. Switzerland is a tax haven.  Switzerland is a high tax country.  Each canton (which is similar to a state) determines the income tax for businesses in that canton. There is no Swiss federal income tax.  

Please enjoy a sample of the audiobook below by clicking on the play button.