U.S. Tax
The world’s largest economy features a great variety of tax structures and taxation entities. Remaining compliant while optimizing your financial goals is difficult, and each situation is unique. Whether you are a U.S. citizen, green card holder or commuter, and whether your business operates as a corporation or partnership, we can help ensure that you understand your rights and obligations in this complex environment.
U.S. PERSONAL TAXES
Tax Return Preparation
U.S. personal tax, while relatively straight-forward for U.S. residents, can be extremely complicated for those living outside of the U.S. With tremendous penalties for a variety of late-filed forms, U.S. citizens with assets or businesses abroad must be diligent and complete with their annual filings. While U.S. commuters are less likely to face significant penalties, the CRA’s reviews of foreign tax credits have created incredible angst within commuters, while placing a tremendous strain upon tax preparers struggling to keep up with the caseload. In both situations, the need for a competent, experienced preparer is paramount, and AM Associates can help.
Tax Audits, Appeals & Voluntary Disclosures
Audits & Appeals: While the likelihood of an IRS audit is significantly lower than that of a CRA audit, IRS audits tend to be more intrusive, and must be approached with care. If faced with an audit, AM Associates can assist with the response, or merely meet with you and your team to ensure that a plan is in place. It is important to understand the potential domino effect of each item under review, and whether any paths lead to significant penalties.
Voluntary Disclosures: Most relevant to U.S. citizens living abroad is the IRS voluntary disclosure program. If you have not been compliant with all of your U.S. personal tax filings, the IRS offers a largely penalty-free program to become fully compliant with your tax filings. The IRS is offering full amnesty to the great majority of U.S. citizens living abroad who were unaware of the full extent of their filing requirements. If you would like an opinion on whether you have been compliant, or if you are filing for the first time, we can assist you understand your obligations in order to avoid the potential penalties.
Estate Tax
Upon the death of a U.S. citizen, green card holder, resident, or property owner, including those with shares of U.S.-based companies, it is essential that the appropriate U.S. estate returns are filed on a timely basis. We can assist with estate planning, compliance, and with the complicated procedure of moving an inheritance across a border.
U.S. CORPORATE TAXES
Tax Return Preparation
U.S. corporate tax often differs significantly from the corporate tax approach in other countries, featuring relatively high corporate tax rates, and low personal tax rates. Much of the system is structured for those who are resident within the country, and these structures often do not work well for non-residents attempting to do business or to make investment in the U.S. AM Associates works closely with clients, CPAs and attorneys to ensure that the U.S. tax structure works for current and potential shareholders.
Corporate Tax Planning
When a Canadian resident is considering doing business in the U.S., the pitfalls that can arise because of the differing taxation systems are numerous. The standard U.S. tax planning approach using LLC’s or S-Corporations can easily create double-taxation situations for Canadian residents. U.S. attorneys and accountants are rarely aware of the issues facing a Canadian investor into the U.S. We can assist with the initial foray into the U.S., to ensure that you have a structure capable of growth and flexibility, while minimizing tax.
State Tax Planning & Compliance
With 50 U.S. states and many more cities and municipalities each featuring their own tax-filing requirements, it is exhausting to attempt to be fully-compliant when doing business in a variety of locations in the U.S. We can help you determine whether you have nexus in a state or city, and can help you structure your business to minimize your filing obligations and taxes.
Sending Employees into the U.S.
U.S. nexus can result in a variety of ways – whether it be by way of a new office, a salesperson signing contracts in the U.S., or a variety of employees working a number of days abroad. Before sending that first employee into the U.S. we advise that you meet with legal, Human Resources and accounting professionals to ensure that you are aware of the rules before creating a significant tax situation.
GILTI Tax Compliance & Planning
The Global Intangible Low-Taxed Income (“GILTI”) tax was part of the sweeping 2017 tax reform that took place in the U.S.. These new rules were intended to deter multinationals from evading U.S. tax by using intangible property to move income to a lower tax country. Unfortunately, it is not only large multinational corporations that have to deal with this tax. Any U.S. persons with ownership in foreign corporations have a potential GILTI tax liability. The rules relating to the specifics of this tax, including methods to eliminate or at least significantly reduce your GILTI tax exposure, are complex, and approaches often vary. If relevant to you, we strongly advise that your situation is reviewed for compliance and for tax-minimization between Canada and the U.S.