Pay tax less for international income

May 13, 2018 12 Comments

Can you advise “legal” structure to pay tax less for international income?
U.S residents should pay tax regardless of where you make money and that means you have to pay tax twice for international income (to the U.S and to the country where you make income). I know I can get some tax return for that.
I want to be more clever at paying tax. I think few options yet I don't know what's most efficient.

1. Have the company make a branch in the U.S and get paid from the U.S arm.
2. Incorporate my own LLC or C-corp and have the company pay to my own company. (LLC vs C-corp, which one is better?)
3. Get paid to my U.S checking account.
4. Simply get paid to my account in the country and transfer to U.S.

Any advice would be appreciated.

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TOP 12 Comments
  • Veritas
    fXXW14

    Go to company page Veritas

    fXXW14
    Talk to a tax accountant. You have 3 variables to consider: the country of your citizenship, the country you reside in, the country the international income originates from.

    1. Reduces forex costs for you. Doesn’t reduce taxes. Trinet is useful if they don’t want to deal with having a full presence in the USA. Typically you want to remain an employee
    2. Implies you aren’t an employee of the main company, instead an employee of your LLC/C-corp. Doesn’t reduce forex, can reduce taxes. Can you live off part of the income? If yes C-corp would have a lower personal tax burden but operating a C-corp cost more money than a LLC.
    3. High personal tax burden and forex risk.
    4. High personal tax burden and forex risk.
    May 13, 2018 1
  • New / Mgmt
    Apple Corp

    New Mgmt

    Apple Corp
    I can connect you to a CPA firm that may be able to help you setup the companies and decide c Vs. S Vs. LLC as pass-thru entities, while keeping it within IRS and treasury rules.
    May 13, 2018 0
  • Amazon / Eng
    Am A Bot

    Go to company page Amazon Eng

    Am A Bot
    There is a foreign tax credit in the US so you aren’t paying taxes twice. If you keep good records you can minimize the tax burden pretty easily.
    May 14, 2018 4
    • OP
      Thanks Bot. I should need a tax accountant to learn more about that
      May 14, 2018
    • Amazon
      jsha5

      Go to company page Amazon

      jsha5
      Dhwla, home sales tend to be taxed very differently by different countries. You can easily end up with a huge bill to IRS and no offsetting tax credit.

      Let's say you buy for 1m, live in it for five years, rent it out for the next five, and sell it for 2m after ten years. IRS won't give you ANY primary residence exception, will tack on tax on depreciation, and a bunch of other things the other country may not do, while the other country may give you a primary residence exception for at least part of the gain. The can result in IRS taxing you on 650k, if they calculate depreciation as 150k, while the other country may decide you owe nothing or much less if you still qualify for their primary residence exception.

      Because it's such as big transaction and because it's often taxed very differently by different countries it's often the trigger for a surprise six digit tax bill.
      May 14, 2018
  • Amazon
    Jeff Bеzоs

    Go to company page Amazon

    Jeff Bеzоs
    Any of these four and you’re going to jail.
    May 13, 2018 3