I'm ready to give up

[Vander]

After much reading on this forum, it looks to me that the US has made it extremely hard to save on taxes, but I will give it one more try. This is my situation:
1. I'm a US citizen
2. I have established business (LLC/S corp) related to software development (we build software for our clients)
3. All of my clients are in the US (90%) and EU (10%)
4. All of my work is subcontracted to companies in India and Europe

How can I lower my taxes? Last year I paid... a lot. Everything is acceptable (moving headquarter, creating new company in different country, creating branches...) except for me moving to another country.
I appreciate all the help!

 

[Golden Fleece]

except for me moving to another country.

That is your main problem right there. If you cannot move offshore, that closes many doors. Think about it logically: everyone would do it if it were that easy to save on taxes -- and your search for information would be easy.

1) You could move to Puerto Rico and live there for 183 days, which technically is not outside the U.S. You could use Act 20 to pay a 4% corporate tax, especially if you run a service business.

Puerto Rico Act 20 & 22: Guide & Personal Experience [In 2020]

Detailed information based on PERSONAL experience with Puerto Rico’s Act 20 & 22 tax incentives. Learn how to LEGALLY pay ZERO US federal income tax, only a 4% corporate tax, ZERO capital gains and dividends tax.

www.sovereignman.com

2) Otherwise, hire a professional to analyze whether some type of foreign subsidiary makes sense, just like Apple and the other big corporations do.

Contact Stewart Patton. He is a U.S. tax attorney who lives in Belize and specializes in this stuff. Pay him for an hour or two of his time. Then you will have a definitive answer as to whether you can move forward or whether this is a dead end. You are simply wasting time seeking information on a forum regarding such a complex tax matter, because any potential solution will be highly fact-specific to your particular case.

Expert US tax planning & compliance advice - US Tax Services

Expat entrepreneurs and offshore investors: end your tax worries and enjoy peace of mind forever.

ustax.bz

 

[Sols]

In my experience, most people who run a business fail to optimize their deductions and expenses. Sit down with a CPA and figure out what options are available to you.

 

[Vander]

That is your main problem right there. If you cannot move offshore, that closes many doors. Think about it logically: everyone would do it if it were that easy to save on taxes -- and your search for information would be easy.

1) You could move to Puerto Rico and live there for 183 days, which technically is not outside the U.S. You could use Act 20 to pay a 4% corporate tax, especially if you run a service business.

Puerto Rico Act 20 & 22: Guide & Personal Experience [In 2020]

Detailed information based on PERSONAL experience with Puerto Rico’s Act 20 & 22 tax incentives. Learn how to LEGALLY pay ZERO US federal income tax, only a 4% corporate tax, ZERO capital gains and dividends tax.

www.sovereignman.com

2) Otherwise, hire a professional to analyze whether some type of foreign subsidiary makes sense, just like Apple and the other big corporations do.

Contact Stewart Patton. He is a U.S. tax attorney who lives in Belize and specializes in this stuff. Pay him for an hour or two of his time. Then you will have a definitive answer as to whether you can move forward or whether this is a dead end. You are simply wasting time seeking information on a forum regarding such a complex tax matter, because any potential solution will be highly fact-specific to your particular case.

Expert US tax planning & compliance advice - US Tax Services

Expat entrepreneurs and offshore investors: end your tax worries and enjoy peace of mind forever.

ustax.bz

Thank you, I will contact Stewart.

 

[Vander]

In my experience, most people who run a business fail to optimize their deductions and expenses. Sit down with a CPA and figure out what options are available to you.

I tried, but there is a limit on how much I can optimize.

 

[Golden Fleece]

I tried, but there is a limit on how much I can optimize.

Well, if you tried that without consulting a knowledgeable tax professional then you will have the same level of success as you are having here in not consulting an offshore tax professional. I have no problem with you trying to get as much free advice as possible (so that you can ask intelligence questions of a professional), but once you have reached that point -- which you obviously have, because you are now "ready to give up" -- then it is time to seek out professional advice. I am always astounded by otherwise successful people who, often knowingly, wear blinders when it comes to reaching out to professionals regarding matters outside of own their area of expertise.

 

[Sols]

I tried, but there is a limit on how much I can optimize.

In addition to what @Golden Fleece said, if you actually have sat down with a good CPA and assessed there are no further tax savings, you're at the end of the line. Maybe there are no tax savings left, short of relocating or setting up some big, sophisticated, and expensive solution involving multiples companies or trusts/foundations.

 

[ShillGates]

I’d say look at your whole plan.

if you pay a lot of taxes then you make a lot profit so all good.

what do you want to do with that profit?

If it’s for example invest in real estate - then setup an appropriate business in the usa to do so where you can get write off s

just my two pence - don’t bother going outside usa if you are unwilling to move - if you are happy in the usa you will make more money there than you will ever save in taxes somewhere else you don’t want to be