Why Estate Planning is Essential for International Entrepreneurs

Margaret Amsden, CPA, MST | Shareholder - Tax Services

Estate planning is not an easy process. When considering the issues that need to be addressed and the questions that need to be answered, it is easy to become overwhelmed. Perhaps not surprisingly, this process becomes even more difficult when viewed from an international perspective.

An essential part of estate planning is understanding the taxation of wealth transfers. In the United States, wealth transfer taxes include:

  • Gift tax
  • Estate tax
  • Generation skipping transfer tax

Do They Affect You? Finalized Regulations on Tangible Property

Margaret Amsden, CPA, MST | Shareholder - Tax ServicesIn September 2014, the IRS issued final regulations regarding the treatment of funds spent on tangible property. In addition to impacting how businesses will file their upcoming tax returns, the new regulations also influence accounting policies currently in place. The biggest change the regulations make is adding clarity around the definitions of what should be capitalized vs. expensed with regard to repairs, maintenance, and supplies.

Mandatory compliance

For tax years beginning on or after January 1, 2014, all taxpayers are required to follow the new rules. Since these rules are changes to current accounting methods, formal elections will be required, and failure to reflect these formal changes will likely increase a company’s audit risk, and could lead to penalties and fines.

5 Questions Answered about the Foreign Tax Compliance Act (FATCA)

Sarah Russell, CPA, MBA | Shareholder - International Tax | Clayton & McKervey, P.C.In our last article, we discussed the basics of FATCA, as well as considerations for non-financial domestic entities and foreign entities.  FATCA withholding began July 1, 2014, and we find many clients still wonder what it all means and why they should care.

Who should be concerned about FACTA requirements?

Any US company that remits withholdable payments to a foreign entity should be in compliance with FATCA.  IRC §1473(1)(A) provides that a “withholdable payment” means:

  • Any payment of interest, (including original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodic gains, profits, and income, if such payment is from sources within the United States, and

Foreign Direct Investment Gets a Boost

Kevin McKervey, CPA | President, Clayton & McKervey, P.C.I just returned from the SelectUSA Investment Summit held in Washington DC March 22-24, 2015, and thought I would provide this re-cap of foreign direct investment interest and activity at a national level.

The Summit was spearheaded by the US Department of Commerce and attracted over 2,700 people from around the globe as well as economic development organizations from every corner of the United States, high-level government officials, and others working to facilitate foreign direct investment into the United States.

Three Major Impacts of the Transatlantic Trade and Investment Partnership

Robert Dutkiewicz, CPA, MST | Shareholder - International Accounting ServicesThe Transatlantic Trade and Investment Partnership, commonly referred to as TTIP, is a proposed trade agreement between the United States and the European Union. The idea of creating a trade agreement between the two largest economies in the world is not new and has been discussed for several decades. However, over the last five years, the idea has gained steam and many predict it will become a reality in the near future. The goal of TTIP is to strengthen both the US and European economies by increasing trade and investment, as well as employment.

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Reward Your Business with an Additional Tax Deduction

Sarah Russell, CPA, MBA | Shareholder - International Tax | Clayton & McKervey, P.C.The Domestic Production Activities Deduction May Be for You

Does your business manufacture products in the US? Does your company employ US residents that work directly with the manufacturing of your product? If you answered “yes” to the previous two questions, your business will most likely be eligible for an additional tax deduction that will reduce your company’s tax liability for the applicable year.

Employee Benefit Plan Hot Topic: Forfeitures

Julie Killian, CPA, CGMA | Principal - Assurance ServicesVesting in employee benefits is an immediate right to a future asset. The vested right is a promise granted to employees in a pension or retirement plan at a future date. Forfeiture of those vested rights can occur if an employee does not complete the specified service period. The use and allocation of forfeitures can be complicated and is one of the areas that the IRS monitors, so much so that the incorrect monitoring or use of the forfeitures could affect the tax-qualification of your Plan.

Healthcare Reform

cfo-roundtableThe December CFO/Controller Roundtable outlined health care reform from the perspective of employers as a result of “Obamacare.” Kristopher F. Powell, CLU, LIC, CEO of HR PRO and BENEPRO based out of Royal Oak, Michigan, discussed strategy and planning as it relates to current reform and what awaits on the horizon for the American healthcare system.

Health Care Coverage Mandates

Individual Mandate

  • Currently in effect and requires all eligible Americans to have at least basic health coverage
  • Penalties will be assessed for each month without coverage based on household income
    • 2014 – Greater of $95 or 1% of taxable income

Starting a US subsidiary?
Seven Reasons Why Cloud Accounting May Be for You

Teresa Gordon, CPA | Shareholder - International Accounting ServicesFor over thirty years, Clayton & McKervey, P.C. has helped foreign owned companies start up subsidiaries in the US by providing a range of accounting, tax, and business services we like to call “hand holding” services. To best serve these companies, our dedicated team of tax and accounting professionals sought out and invested in several new cloud accounting applications and are adapting them to fit the particular needs of the US subsidiary and its foreign parent company.

China Unveils List of 15 ‘Unacceptable’ Tax Practices in Crackdown on Multinational Companies

Alex Martin | Principal - Transfer Pricing ServicesSubstantial increases in tax disclosures will provide a road map for China’s SAT

China’s State Administration of Taxation (“SAT”) recently announced a major initiative to collect global tax information from multinationals to challenge 15 “unacceptable tax practices”.  The new General Anti-Avoidance Rule (GAAR) Circular No. 32 published on December 12, 2014 signals an accelerated timetable to crackdown on profit shifting through transfer pricing.

Multinational companies of all sizes need to be aware of the SAT’s plans for increased scrutiny, as the SAT has a particular focus on capturing more corporate income tax in China.  To facilitate this initiative, China plans to institute requirements for country-by-country reporting where Chinese and foreign multinationals will need to disclose income taxes paid in every country where they operate to the SAT.