Hot answers tagged tax
9
It is a common misconception of entrepreneurs that control flows from owning a majority of the stock.
Stock ownership and control are separate and independent.
Control is determined by the legal documents you draw up when you form the company. The most important documents are the company bylaws, which determine how the company operates, and the shareholder ...
6
You can do it on-line at IRS.GOV (here's the direct link to the EIN page). If you don't want to apply on-line (and get the number instantly), you can instead fill and send the form SS-4 (and wait for the number for several weeks to arrive in the mail).
Make sure to read all the information and the instructions on the site to understand how to fill the form ...
5
For the moment, let's put aside the issue of saving taxes. Incorporating in a tax friendly country sounds great on paper, but IMHO it normally doesn't make sense for a startup.
First, if you are just starting out, odds are your business won't be generating a ton of income, so any money that you might save by incorporating off-shore will likely be very ...
4
Who gave you that advice? Take tax advices only from licensed tax professionals (CPA, attorney or EA).
There's no tax benefit in LLC. If at all, you'll pay more taxes, especially in CA with its $800 franchise tax and LLC fee. For income tax purposes LLC is a disregarded entity, and you're taxed at your normal rates, whether you're a LLC or a sole ...
4
Several links for you:
KPMG Paper on (US) State taxation of cloud services.
CBIZ article on the same (which is shorter, but essentially repeats
the same as KPMG).
Pennsylvania State tax authority ruling on this issue re the
servers in PA.
Bottom line is that your concern is valid, and there are definitely potential tax pitfalls in this model. You should ...
4
There are definitely tax reasons to pay out dividends and not salary (primarily - lower tax rates on qualified dividends, which may expire at the end of the year, and the absence of the FICA and payroll taxes).
However, personal services C-corporations are taxed at higher (flat) 35% rates, which may not be the best rate with lower income corporations. ...
4
There's no tax on S-Corp distributions. There's tax on your income. It is called "ordinary income" and is taxed at your marginal tax rate. There's no difference between the first 50K you got as salary and the second 50K you got as distribution in that respect - they're both taxed at your ordinary income rates. The salary portion is also subject to the ...
4
I'm not-US citizen that want to incorporate C-Corp
This is not a problem. No-one cares about your citizenship when you open a corporation.
However, there are a couple of problems hidden here:
I will fly to US in order to open US bank account
You cannot do that. You won't have signature authority (as non-employee).
My company should based on ...
3
If you wish to do this then you should consider C-corp status.
The simple answer to your question is, "No", but it looks like you are looking for more detailed ways to play games with revenue, etc. (based on the comment(s) you have for other response(s).)
You need the help of an accountant and/or attorney. You should probably get professional help for ...
3
Of course they incur tax liability. Its pretty simple, actually: according to Kickstarters, projects are required to provide rewards. That means that the funds the projects receive are actually sales.
This allows the project owners treating the project just as any other retail business, but since the rewards are considerably cheaper than the actual project ...
3
There's a bit of a confusion here. First, you have to understand (according to the IRS circular 230), that my answer was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. This is not a tax advice.
The benefits of S-Corp are that you may not be required to pay ...
3
No, an accountant is not required. I've done my Ontario Provincial T2-Short my self every year since 2006, it is not even that complicated. You only really need an accountant if you start getting in to a lot of accounting tricks etc.
You can also buy off-the-shelf software to do your T2 Corporate tax return for a few $100 from Quickbooks or the like, but it ...
3
An invoice is a bill; if someone asks you if you can invoice them, they're asking you if you can send them a bill that they can pay.
If you're an individual in the UK, to invoice someone, you generally need to be registered as self-employed with the Revenue. This doesn't change your normal employment status -- that is, your normal job is unaffected -- but ...
3
So after talking to our registered agents, some people familiar with taxes, reading the Delaware tax site, researching the web, and getting conflicting advice from all of them, I finally just found the number for the Delaware franchise tax board, called them, waited forever, and got an answer. We do NOT need to pay taxes as our company was filed in 2013 and ...
3
It depends on what you mean by "sufficient." It's certainly legal. You might be liable for certain sales taxes in the United States or have to pay franchise fees with certain states, but those are more complicated tax questions that deserve a tax attorney's expertise.
As for payment gateways, PayPal is international-friendly, but the problem you might face ...
3
You both know sometime reaches when tough decisions should be made. It is not about power or financial benefit. Equal shares will end up you to deadlock in some point. Don't ruin fairness for 2% more shares or something like that. You need a third person who should be trusted by both of you. Whenever a deadlock is going to happen this person will prevent it. ...
3
For small businesses there are third party providers that can do all the hard work for you at a relatively low price ($25/mo with Quickbooks, for example). It is definitely not something worth doing on your own.
Larger companies either work with third party providers (like ADP for example) or have their own accountants do that for them.
Generally there are ...
2
It is likely to be a tax evasion scheme. You should do that, if you decide to, very carefully. US citizens are liable for paying taxes on their world wide income, and the fact that the income is from a Dubai-registered company and not a US company is rather meaningless if they're not moving to Dubai themselves.
2
Probably it is. For California I can tell you that not only you're required to register with the state for tax withholding, you might be liable for franchise tax as doing business in the state (that's $800 a year if you're a corporation, LLC or a LP/LLP).
Here's more detailed info re California.
2
You should change CPAs. If you operate your business in Virginia, you will have to pay Virginia state taxes, regardless of where the corporation is formed. If your corporation only has a single stockholder, then you probably don't need to incorporate in Delaware -- most of the advantage of Delaware only really matter when you have multiple shareholders ...
2
Delaware tax is indeed flexible, and Delaware imposes tax only on income earned in Delaware. Depending on your business plans, it may be favorable. You should check what taxes you pay to Virginia, as well. As you live in Virginia and will probably work for your corporation, it will likely to be required to qualify to do business in Virginia and pay VA taxes. ...
2
Is it feasible to contact a tax accountant and have him answer these
questions by e-mail.
Generally, yes.
What would be a reasonable amount to pay for this information?
Charges vary significantly, and obviously the more experienced and knowledgeable providers charge more. You can expect somewhere between $100 and $500 hourly rate (yes, the ...
2
You should seek a tax professional to help you with that. I'm a tax professional, so a disclaimer is required: nothing I write here was intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on any taxpayer.
You only have to pay yourself a salary if you have net income from the ...
2
Here's the link to the FTB definition of "doing business in California". If your LLC fits the requirements - you'll have to chip in with the Golden State. Based on what you've described, it doesn't look like you'll have to pay the $800 merely because of the investor, but do get a consultation with a California licensed CPA to ensure that.
2
Is it considered a taxable fringe benefit for the employee?
Yes.
Does the company have to report the proportion of personal use on the
vehicle against the expense of the rental company as a taxable
wage/income?
Yes.
Don't forget to tip your server.
2
No, you cannot. You can only deduct charitable contributions if they're to an organization recognized by the IRS, and that goes on schedule A. You can deduct business expenses if they're ordinary and necessary, and that goes on schedule C. Your donation is neither charitable nor necessary, thus non-deductible.
2
Your income is taxable. It is your income, and you're a US-based company, so you're liable for taxes in the US. Of course you can deduct your business expenses to calculate the net taxable income, your accountant will help you with that.
The fact that your subscribers are non-US has no relevance, they're not the ones taxed. If you're remitting money to ...
2
http://www.cra-arc.gc.ca/tx/nnrsdnts/bsnss/bs-rs-eng.html
Typically a company is a Canadian Corporation for tax purposes if:
It's owned enriely by Canadians
It's operated entirely by Canadians
It's been incorporated in Canada
So you will be caught by the first 2 points regardless.
But don't despair! There are loopholes like transfer pricing that you ...
2
Whether the payer reported your income or not makes no difference with regards to the question of whether it is taxable. If your income is taxable you're required to have it reported and pay taxes. In many cases, if the income is not taxable, you're still required to report it and explain why it is not taxable.
In the US, 1099K are required only for ...
2
It is the law of land that always applies (and takes precedence in case of a treaty with another country). Period. If you want to be governed by UK laws only, your company should be limited to UK only. If you are doing business in Canada and have presence there, Canadian laws and only Canadian laws will apply there. If you register a UK company that wholly ...
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