Migrating personal expenses to business expenses

[FrankSmith]

As a US citizen operating a sole proprietorship registered in the US, I am not legally able to deduct personal expenses as business expenses. All of my business revenue comes from offering Business Management Consulting services and training workshops in the US. I am planning an international expansion and cannot figure out if incorporating offshore is right for my situation. I am afraid I could get double taxed on any revenue generated within the US, but want to operate transparently and legally.

If I offshore the company do the rules change regarding business expenses?

Can the offshore corp purchase my home from me, which I use a as home office for the business?

Same question above for my personal vehicle?

Where is the legal line drawn and which country has the loosest regulations when it comes to accounting for business expenses?

Can I minimize my US personal income tax liability by minimizing the salary the offshore corp pays me?

Can the offshore corp defer US taxes indefinitely as long as profits are not repatriated even if the revenue was generated by contracts with US clients?

 

[mnschwarz]

Each jurisdiction has their own rules regarding business expenses. I think you'll find many are more lenient that the US.

Again depends on the jurisdiction but most should be fine. I'm not aware of the laws in the US regarding foreign entities owning property so check that but I think that is also fine. You will just have to make sure the sale/purchase is done at arms length. Meaning a fair market value applied & paid.

I see no problem with the company owning your vehicle provided it is not secured by a loan etc.

Many offshore jurisdictions require absolutely no accounting records & apply no tax. If you go this way, it kind of negates the concern for double taxation.

You will pay personal tax on whatever you personally earn. Pay yourself as little as needed basically. Have the company pay (if related) instead of you. A good accountant will no doubt know other ways to minimize taxes.

You'd need to ask a US accountant about that last one. I believe you would have to pay tax if the income was derived from the US but there may be ways around it.