Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

I am an American living in Germany married to a German citizen

(no Green card or US...
I am an American living in Germany married to a German citizen (no Green card or US permanent residency) about to start a business in the US. I am currently planning on incorporating in Wyoming as a C-Corp. According to my German tax advisor, I will pay corporate taxes in both the US and Germany, but US tax paid will count toward my German tax liability. Is a Wyoming C-Corp the best choice to minimize my tax burden?
Show More
Show Less
Ask Your Own Tax Question
Answered in 4 hours by:
10/2/2013
USTaxAdvising
Category: Tax
Satisfied Customers: 1,237
Experience: US Taxation specialist.
Verified

Hello,

 

A Wyoming C-corp is a good choice much like Delaware where are there are no corporate taxes, other than annual filings fees.

 

I am wondering if you have considered a S-Corporation or LLC/passthrough entity in the US. I would not think the C-corp would give you the optimal tax structure in the US. You would want to take advantage of the foreign earned income exclusion or foreign tax credit from an individual standpoint as well.

 

I am not familiar with German taxes but from a US perspective using the C-corp will give rise to double taxation to you in the US, which is really not necessary in my opinion. If you need the company to pay income tax in order to qualify for German foreign tax credits then it might be beneficial. But using a C-corp will expose the C-corp to federal tax and then you will also be exposed at an individual level when you receive dividends from the C-corp. (unless of course you take all the cash out of the company via wages)

 

But to answer your initial question, Wyoming is an excellent choice as is Delaware.

 

Let me know if you have any other questions on this.

 

Best regards,

Ask Your Own Tax Question
Customer reply replied 4 years ago

I had elected to go with a C-Corp for a few reasons. The first is that in the US I currently have to file and am taxed as though I were single due to my wife's immigration status.


 


The combination of all US taxes is actually higher than my equivalent tax burden would be in Germany according to my advisor here, as I pay at the married rate in Germany. They also consider me liable for the corporate earnings of a US-based corporation if the CEO maintain s German residency.


 


Your point about the foreign income tax credit seems well taken, but I'm not sure it would apply given that Germany would charge tax on top regardless. At least that's my current understanding.


 


What taxes would apply were I to choose an S-Corp or an LLC? Would I potentially have to pay for health insurance I won't/can't use? Social Security that won't exist when I retire anyway?


 


The other point is that the tax credit is not a given in the years ahead. The ease of raising taxes on expats makes for an easy fix for Uncle Sam. There's no guarantee that it will be there in the future.


 


Thanks for the answer, but I had hoped someone with experience in both tax systems would be able to address my individual situation.

What taxes would apply were I to choose an S-Corp or an LLC? - basically just what you would pay as a self employed US citizen, federal, SS, MHI. Would I potentially have to pay for health insurance I won't/can't use? - no you would not have to pay for health insurance. Social Security that won't exist when I retire anyway? - That's an assumption really, not a fact. But well said. :)

 

The other point is that the tax credit is not a given in the years ahead. The ease of raising taxes on expats makes for an easy fix for Uncle Sam. There's no guarantee that it will be there in the future. - Correct, there is no guarantee but it has been around for decades. Taking this away would make the U.S. tax structure similar to that of North Korea.

 

Let me know if this does not answer your question about the location of your US incorporated company or if you would like to see if another expert has experience with both tax systems. (I don't think it is likely but not impossible) I would then opt out and you could wait to see if another expert takes your question. You would then be working with a different expert.

 

If you have any other questions please feel free to post them and I will get back to you as soon as I can.

 

Best regards,

 

USTaxAdvising
Category: Tax
Satisfied Customers: 1,237
Experience: US Taxation specialist.
Verified
USTaxAdvising and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask USTaxAdvising Your Own Question
USTaxAdvising
USTaxAdvising
USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1,237
1,237 Satisfied Customers
Experience: US Taxation specialist.

USTaxAdvising is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
How much is UK Corporation Tax on foreign dividends received
Hi Tony,How much is UK Corporation Tax on foreign dividends received from Honk Kong subsidiary?The recipient of such dividends is UK based Limited company. Are these foreign dividends exempt for a "sm… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
A foreign individual is a member of a US LLC. Are there any
A foreign individual is a member of a US LLC. Are there any extra requirements for filing when it comes to the partnership return?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
Can my LLC with US and Foreign members be a shareholder in
Can my LLC with US and Foreign members be a shareholder in an S Corporation? The K-1 would go to the LLC.… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
RE: FOREIGN TAX CREDIT We're filing a married joint filing
RE: FOREIGN TAX CREDIT We're filing a married joint filing tax return and have come up against some problems on form 1116. 1) Do we add both our names on the form? 2) On line 3a, it asks for certain i… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
REGARDING THE FEDERAL TAX LAW INTHE US. IF ONE RECEIVES
REGARDING THE FEDERAL TAX LAW INTHE US. IF ONE RECEIVES ALIMONY PAYMENTS, WHAT CAN QUALIFY AS TO ***** REDUCE THE TAX ON THE ALIMONY RECEIVED ? CAN BUSINESS LOSES BE CARRIED OVER TO REDUCE THE TAX ON … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I filed for federal tax extension and was approved, file
I filed for federal tax extension and was approved, file under married separate, after divorce finalized, in divorce decreed I am to file singe from 2016 forward, so do I have to complete the extensio… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
738 satisfied customers
Federal Tax Credit or NC Tax Credit For 2017, is there any
Federal Tax Credit or NC Tax CreditFor 2017, is there any type of tax credit for replacing a roof on a historical house (1870)? It is primary residence. They will either replace the roof or do "hydros… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
I have a foreign tax credit carryover from 2016 to 2017 and
I have a foreign tax credit carryover from 2016 to 2017 and am wondering if i can take it even though I have no foreign sourced income in 2017 … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
Im. In 2016 i filed federal taxes and used standard
in 2016 i filed federal taxes and used standard deduction, not realizing i might have some itemized deductions … read more
abci168
abci168
Principal
27 satisfied customers
Us citizen living and working in colombia SA earned income
us citizen living and working in colombia SA earned income and unearned how do i report the interest and dividends are these tax at he same rate or can you also exclude them like the earned income … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
738 satisfied customers
International attorney that can help with double Taxation
International attorney that can help with double Taxation treaty between US and Germany. A US Green card holder in the year 2014 worked in Germany more than 183 days as a doctor, but less than 330 day… read more
taxmanrog
taxmanrog
Master\u0027s Degree
702 satisfied customers
I would like help with claiming a foreign tax credit from
Hi, I would like help with claiming a foreign tax credit from Canadian form NR4 … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
738 satisfied customers
I have a foreign tax credit question... I have cancellation
I have a foreign tax credit question... I have cancellation of debt income of $50k from a foreign lender (England) on a K-1.(Taxpayer is a G.P.) Can I characterize that relief of debt as passive incom… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Foreign earned income tax exemptions. My husband started
foreign earned income tax exemptions. My husband started working in the UAE in February 4, 2017. How many days is he allowed to physically visit the USA in a 12 month period to be qualified for the ex… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I am looking at the form 1116 (foreign tax credit). I have
I am looking at the form 1116 (foreign tax credit). I have paid $30,000 in taxes in the UK (I live all year here), the US tax says line 22 on the form can only be 21,000. Where do I report the carry o… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have a new client with quite a large foreign tax credit
I have a new client with quite a large foreign tax credit carryforward, strictly from wages while working in Canada in 2015. He did not work in Canada in 2016. It is not taking this credit at all agai… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I am carrying forward a foreign tax credit but i do not know
Hello i am carrying forward a foreign tax credit but i do not know how to claim it i paid for premium software, yet there is no entry for it … read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
I have to use form 1116 for a foreign tax credit line 14
I have to use form 1116 for a foreign tax credit line 14 code B the amount is 108, I got to putting in the country which is various, where do I put the 108 … read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x