Tag Archives: small business tax plan

Nevada or Delaware Limited Liability Company (LLC) for International Business

The Nevada or Delaware Limited Liability Company (LLC) for International Business is the worst choice for a privately owned business.   Doing business in countries that have a tax treaty with the U.S. requires the use of a corporation.  In some of the newer treaties a partnership gets some tax advantaged if you can get the IRS to issue a tax treaty certificate. 

The domestic limited liability company is an American entity.  It is not classified as a corporation for international business or for domestic business.    Making matters more awkward, the LLC tax classification does not fit into the concepts found in tax treaties. 

The Nevada or Delaware Limited Liability Company (LLC) for International Business May Not Protect You form a Creditor.

Since other countries do not have the U.S. tax concept of the LLC, you may not get protection for a creditor.   

And there is more bad news.  For example, while the Dutch has a fantastic tax treaty with the United States, the American small business owner can fail to get all of the intended tax benefits.   The major tax treaty benefit is avoidance of paying tax in the foreign country and not filing a tax return with the foreign government.

Here is the international tax problem with the LLC

The permanent establish article does not reference a limited liability company.   The small business owner is in a risky position.   If the/she can lose the U.S. foreign tax credit if they fail to pay the foreign country’s tax when the tax is due.   For example, you are based in the Netherlands and you decide not to file a dutch income tax return for the LLC for year 2017,

In 2021, the Dutch audit you.  Since you never filed a return, they can charge you the tax.   In 2023, you make the decision that the legal fees of fighting the tax are too expensive.  So, you pay the tax.   Since the U.S. taxable year was 2017, you are six years late in claiming the foreign tax credit.

You end up paying tax twice.  First, to the IRS in 2017 on the Dutch income.  Then in 2023, you pay the tax a second time to the Dutch government.

The Best Small Business International Tax Structure and Entity

The United States Department of Treasury decided to help the small business owner obtain the maximum tax benefits by allowing you to treat your foreign corporation as a domestic corporation.  This process is known as a domestication.    As a domestic corporation, the American can elect taxation as a subchapter S corporation.

Tax treaties give corporations permament establishment protection.  If you do pay a foreign income tax, the IRS foreign tax credit rules apply to a subchapter S corporation.  The foreign tax credit allows you to offset your IRS taxes with the tax you pay to a foreign government.

Below is a short video on the domesticated foreign corporation.  While the video is about Mexico, the same rules apply to Europe.

President John Kennedy – Our Obligation to Avoid Taxes and to Use Our Talents for the Benefit of Society

Just a short blog post that I hope we provide what I call “staple news”.   The chaos not only between the two parties but in the two parties can cause us to forget the tried and true course.   I picked President John F. Kennedy because he is the darling of the Democrats and those that call themselves liberals.

small business tax planning,

President John Kennedy (Democratic) is the most important president of last century. The President and Supreme Court Justice Holmes agreed… it is your duty to pay the least amount of taxes.

Yet, many of those same people have hatred towards independent voters that support the dreams and economic policies of this great President.

The photograph on the left says it all. While a government job is better than no job, it requires the Government to take (also known as steal) money from a non-government worker. A government job does not create a car, food or exports. The ideal job for a country is one that makes the country wealthier.

If you have a small business, this link has five sophisticated tax plans that your CPA may not have explained to you.  They are used the wealthy and the rich to avoid taxes so that they can create more jobs.

And there is more. Those the have the advantage of a higher education have an obligation to protect the Country by helping the population become educated. I have heard complaints about those that voted for President Trump. If you do feel that way, then please listen to JFK in this video below.

How Do You Know If You Have the Best International Tax CPA

With a million pages of tax law, you want the best tax accountant.  However, the question is do you want to pay for the best.    Is a tax accountant like a car?  Are they all the same.  Do you feel that all cars are the same as far as safety and comfort?  

Is an international tax accountant the same as an international CPA? 

If you want the best, it cost more.   But can the best CPA save you money?  

Senator Bernie Sanders think they can.  During the campaign, he had the U.S. Senate investigate big businesses that hired the best CPAs for tax planning.   The businesses average tax rate was 14%.    Most small businesses are taxed at 35% and up to 54% if you include the Self-employment tax.   Here is more on Senator Sanders report.

 If you are looking for international tax planning, here is a link to the U.S. Government secret report on legitimate offshore tax planning that they can’t stop.  It is detailed and if you want something that is an easy two-hour read, then get my book, on this link.

What to look for in the “best tax accountant.”

  1. A CPA certificate
  2. A masters degree in taxation
  3. 2018 tax planning started in  2016 and
  4. He saves you ten times the amount you pay him or her.  For example,  a tax accountant may look at your expenses.  The tax law is will establish on what can be deducted and he or she only needs a few minutes on tax planning on this topic.   Income and cash receipts have more tax strategies.  Not all cash receipts are taxable when received.  Avoiding state income taxes is done by looking at the type of activities that can be earned by a Nevada trust or a Nevada corporation.

What you need to do for tax planning.

You are the leader of your tax team.  As such, you take the lead in scheduling quarterly meetings. Yes, this will cost some money and money you pay is deductible.  Meanwhile, the amount you pay in taxes is not.  For example, if your quarterly meetings cost you $20,000 a year, then your after-tax cost is about $10,000.    I would expect you would save $50,000 in U.S. and state income taxes.

Want some tax ideas to brainstorm with your tax team?   Then please look at the topics of our blog talk network, Tax Talk, on this link.

 

 

 

 

By far the best international tax CPA in the country. 

Small Business Best Tax Plan

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

The best Democrat President was John F Kennedy.  He was liberal to the core.  Jobs for the middle class and the working class was his economic mission.  

Yet, he lowered taxes and encouraged business to legitimately avoid taxes.

I want to encourage each of you to do the same.   Creating jobs is a fantastic humanitarian act.  But, you have to work hard to avoid taxes.  

Great tax planning looks at each aspect of your business.  Each part of your business may have different tax laws. 

By the way, a recent Congressional study showed that businesses that plan their taxes have an average tax rate of 14%.  If you are paying than 14%,  then you are paying more than your fair share.

The good news is that you have new opportunities to have more money. Here is what you can do.
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IRS Explains How to Not e-File your return and Avoid Identity Theft

irs super computer, robo audit, why file a paper,

The IRS super robot is fast and smart. It can read every e-filed tax return in less than one day.

Yikes. Another break-in at the IRS!  

Seems that the IRS is an easy mark for street gangs having “laptop parties.”  Good news… buying illegal drugs is harder because the gangs have social gatherings, called laptop parties,  where they steal your tax return.

Every year, the IRS has lost $5 billion dollars in e-files tax refunds from Identity Theft.   Trying to get your money back requires the help of your Congressman.

Solution:  Stop your e-filing and file paper income tax return.

But there is one more big reason.  Your chances of avoiding an  IRS audit are increased.  As my radio show explained, the IRS is relying on its supercomputer and its robot auditor (robot-audits).   The flaw is the robot auditor cannot read a paper return.

If you missed the 30-minute radio show on the IRS super computer and their robo-audits, then here is a link to  Blog Tax Talk radio shows.

The IRS website provides the following information.

16. Can my clients choose not to e-file?

“Yes. Even if you are a specified tax return preparer, your clients may independently choose to file on paper. Preparers should document each client’s choice to file in paper format and keep a signed copy of the statement on file. See FAQ 17 below for the statement. Do not send the statement to the IRS or attach it to the client’s tax return. Instead, specified tax return preparers should attach Form 8948,”

“Preparer Explanation for Not Filing Electronically, to your client’s paper return and check box 1. Include your PTIN on each tax return where requested. If your clients are filing a joint return, only one spouse’s signature is necessary on the choice statement.”