income tax Archives | SF Tax Counsel

09Apr 2021 by Pat Geddie

Many Fortune 500 Companies Use Foreign Subsidiaries to Avoid Paying U.S. Tax- Here is One Way Your Foreign Corporation Can Avoid Paying U.S. Income Tax

By Anthony Diosdi The Internal Revenue Code provides that a U.S. shareholder of a controlled foreign corporation (“CFC”) is subject to tax on the CFC’s subpart F or global intangible low-taxed income, called “GILTI.” For many years, U.S. multinational corporations and other CFCs were able to utilize a high-tax election to defer the recognition of Subpart F income. However, when the GILTI taxing regime was announced in late 2017, a corresponding high-tax election was not available. Shortly after the enactment of the GILTI taxing regime, U.S. multinational corporations and their advisors began lobbying the Department of Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) to issue regulations to permit the use of a high-tax election for GILTI income. On July 20, 2020, the Department of Treasury (“Treasury”) promulgated final regulations…

15Mar 2021 by Pat Geddie

Tax Deadline Approaching for 2021

tax planning

In 2020, The Internal Revenue Service (IRS) extended the tax deadline due to the impact of the start of the COVID-19 pandemic. With the pandemic still continuing, many people are wondering whether they will be able to delay their tax filings in 2021, as well. The IRS has not extended the tax deadline for the general public, and it remains on April 15, 2021. Democrats in the House of Representatives are continuing to request that the IRS extends the deadline again, but there is no guarantee that will happen. It is best to abide by the usual deadline this year instead of expecting a last-minute extension. Some people across the United States will receive an automatic extension due to natural disasters in their areas. For example, taxpayers impacted by the…

10Feb 2021 by Pat Geddie

Mistakes on Your Taxes Can be Costly

Tax Law

As tax season is upon us in 2021, many people might be debating whether to consult with a tax lawyer regarding their filings. While it can be tempting to try to save money by attempting your taxes on your own, be aware that even a seemingly minor error can be costly in the long run. First, keep in mind that tax laws are always changing. Just because you maximized your deductions last year does not mean the same will work the next year. If you miss a changing law that might benefit you, it is common to pay much more than you should. Next, if you fail to claim all of your income, gains, or international accounts, you might end up paying less than you should. If the IRS conducts…

18Jan 2021 by Pat Geddie

What International, Corporate, Estate, and Individual Taxes May Look Like Over the Next Four Years

Tax Law

By Anthony Diosdi With the Democrats gaining control of the executive and legislative branch of the government, there will likely be major changes to the Tax Code. Recall that in the 2017, the Tax Cuts and Jobs Act overhauled the corporate and international systems. The Tax Cuts and Jobs Act reduced the corporate income tax rate from a maximum rate of 35 percent to 21 percent. The Tax Cuts and Jobs Act also enacted the global low-taxed income (“GILTI”) and the foreign-derived intangible income (“FDII”) tax regimes. President-elect Joe Biden seeks a major overhaul of the U.S. corporate income tax system. The Biden team also proposes significant changes in the way cross-border transactions are taxed. We will begin with a discussion regarding the proposed corporate tax rate increase. During the…

04Jan 2021 by Pat Geddie

Things to Know About the 2021 Tax Season

tax planning

2020 was an unusual year, to say the least, and taxes were no different. While the pandemic and related financial crisis continue across the country as we enter 2021, what can you expect this year when it comes to your tax filings? The following are some things to know, and you can always discuss the matter more closely with a tax lawyer in San Francisco. No Filing Extension Yet As of now, the tax deadline is the traditional date of April 15, 2021, and there has been no extension announced for filing 2020 taxes by the Internal Revenue Service (IRS). Make your appointment with an attorney now, so you can be prepared to file on time. Income Brackets and Deductions The income brackets and standard deductions were also adjusted for…

22Oct 2020 by Pat Geddie

Introduction to International Income Tax Treaties

Tax Law

By Anthony Diosdi IntroductionThe major purpose of an income tax treaty is to reduce or eliminate the impacts of international double taxation by residents of one treaty country from sources within another treaty country. Because tax treaties often reduce U.S. and/or foreign tax consequences associated with a cross-border transaction, anyone involved in international transactions or commerce must consider utilizing an applicable income tax treaty. This article is designed to provide the reader with a broad overview as to how an income tax treaty can be used by U.S. residents and nonresidents to reduce their exposure to global income taxation. Many of the income tax treaties to which the United States is a party are similar to the United States Model Income Tax Convention of November 15, 2006 (“U.S. Model Treaty”).…

01Sep 2020 by Pat Geddie

Income Tax Consideration of Property Inherited from a Foreign Individual

Tax Law

By Anthony Diosdi Many U.S. income tax questions arise in connection with the receipt of inherited property. These questions generally include whether the recipient must include the value of such property in gross income for U.S. tax purposes and what will be the U.S. income tax consequences of the recipient’s subsequent disposition of the inherited property. This article will briefly summarize the more relevant U.S. income tax consequences in connection with inherited property with emphasis on property inherited from a foreign individual. Although the U.S. has a transfer tax regime that could impose an estate tax upon the transfer of the property of a decedent, the estate tax is generally imposed on the estate of a decedent and not on the recipient. However, the estate tax generally reduces the value…

01Jul 2020 by Pat Geddie

Caution- The 2019 Calendar Year Has Yet Another International Return Requirement

tax planning

By Anthony Diosdi Individuals with foreign assets are subject to never ending informational return requirements. This tax year there is yet another international reporting requirement. Form BE-10 is a benchmark survey from the Bureau of Economic Analysis (“BEA”) which is under the United States Department of Commerce. The BE-10 is conducted every five years and is designed to collect information for all U.S. direct investments abroad from both large and small entities. The BE-10 treats all individuals as entities or companiesThe 2019 calendar year is a “Benchmark Year.” This means if you or a business that you own conducts any business outside the United States or holds assets outside the United States, you may be required to file a BE-10. Unlike FBAR informational returns, there is no $10,000 threshold. The…

20Mar 2020 by Pat Geddie

The IRS Delays the Filing Deadline from April 15th to July 15th

tax planning

By Anthony Diosdi Treasury Secretary Steve Mnuchin made the following announcement on Twitter “At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.” This means that in addition to providing taxpayers with additional time to pay their 2019 income tax liabilities, the IRS has extended the 2019 filing deadline from April 15th to July 15th. If taxpayers file extensions, they will be able to extend the filing deadline for their 2019 tax returns to October 15th.Anthony Diosdi is a partner and attorney at Diosdi Ching & Liu, LLP located in San Francisco, California. Diosdi Ching & Liu, LLP also has offices in Pleasanton, California and Fort Lauderdale, Florida.…

18Mar 2020 by Pat Geddie

The IRS Has Deferred 2020 Income Tax Payments by 90 Days. What Happens in 90 Days?

Tax Law

By Anthony Diosdi Treasury Secretary Steven Mnuchin recently announced that the Internal Revenue Service (“IRS”) is deferring income tax payments for the 2019 tax year by 90 days. Steven Mnuchin says that taxpayers will not be assessed interest and penalties on the late payments. According to Mnuchin, individuals can defer up to $1 million in federal taxes. Businesses can defer up to $10 million in federal taxes. The deferral is only available for tax payments. It does not permit the deferral of payroll taxes or estate and gift taxes. The announcement also does not impact estimated tax payment requirements. As of now, the income and corporate tax filing deadlines still have not pushed back. Although the announcement this is a step in the right direction. It does not go nearly…