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"We came to Lodder CPA at a critical point in our company’s growth. Our business was scaling quickly, and we needed reliable, strategic tax support, especially with cross-border considerations and entity structuring.
We needed a partner who could help us optimize and plan ahead with confidence. We chose Lodder because of their deep understanding of international tax issues for U.S. based businesses. We’ve been pleased with their responsiveness and the way they take the time to explain different concepts to you as they go.
Since working with Lodder, we’ve gained peace of mind and confidence that our taxes are handled properly.
If another founder asked me about Lodder, I’d tell them this: If you’re serious about your business, don’t cut corners with your accounting. Lodder isn’t the cheapest option, but they are worth it.
Jon Persson
Co-Founder
Find answers to frequently asked questions about our services and international taxes.
This income is included on your U.S. tax return. It’s also possible that this income is taxable in the foreign country. You would need to determine the tax implications with your tax professionals in the U.S. and abroad. If there is an income tax liability in the foreign country, then you may be able to obtain a foreign tax credit on the U.S. return to avoid double taxation.
Possibly. However, there may be anti-tax deferral provisions such as Global Intangible Low-Taxed Income (GILTI) that could apply that cause you to pay current tax on this non-U.S. income. You should seek tax advice to avoid onerous tax provisions.
No. GILTI applies to corporations who would otherwise be able to defer U.S. corporate income tax until a dividend is paid. Income from the partnerships or pass-through entities is includable on the U.S. company return in the year it is earned.
Under current law, there is no tax since the U.S. corporation would obtain a 100% dividend deduction.
Yes. U.S. corporations benefit from tax incentives such as deducting a portion of foreign-derived intangible income (FDII), linked to intangible assets held domestically. Additionally, the Interest Charge Domestic International Sales Corporation (IC-DISC) provides substantial tax savings for exporting U.S. products. Unlike tax shelters, IC-DISC facilitates permanent tax savings by transferring income through export sales commissions.
Yes. U.S. citizens need to file and prepare U.S. tax returns if the filing thresholds are met, regardless of whether or not they live in the U.S.
They may be exposed to late filing penalties, late payment penalties and interest, but also the significant penalties from late filing certain U.S. international information returns such as the Forms 8938, 5471, 8865, 8858, 8621, 3520/3520-A, FBAR, etc. The penalty exposure for filing each of these forms is $10,000+.
As long as the person wasn’t aware and immediately took action to fix the problem, then they may qualify to become compliant with the U.S. tax system by filing delinquent returns pursuant to the Streamlined Filing Compliance Procedures.
Yes. The U.S. tax return still needs to be filed. The gross income needs to be reported, and then the foreign earned income exclusion is claimed on the tax return to exclude this income from being taxable on the U.S. return.
It depends, since each situation is different. Sometimes the foreign tax credit option isn’t available if the U.S. person lives in a country which doesn’t have an income tax which can then be used as a credit against the U.S. tax liability. In countries that have an income tax, often it can make sense for U.S. citizens with dependent children to claim the foreign tax credit to receive a refundable child tax credit.
Often this is the case. But there are many considerations. For instance, only $250,000 of gain from selling a primary residence is tax-exempt in the US. Different tax incentives abroad can lead to credits, deductions, and exemptions not available under US law, potentially increasing tax liability. Additionally, anti-tax deferral rules apply to non-US corporate interests. Given these complexities, consulting a qualified US international tax specialist is crucial.
Income earned within a corporation generally isn't taxed on the US shareholder's federal return, allowing tax deferral until profits are distributed as dividends. Subpart F, GILTI, and PFIC are U.S. tax rules aimed at disincentivizing U.S. income tax deferral and wealth accumulation within a foreign corporation. Consulting a US international tax specialist is crucial for navigating these complexities and optimizing the tax position.
Owning assets abroad exposes one to IRS disclosure and tax implications. Consulting a US tax advisor is crucial due to complexities in owning partnerships, trusts, corporations, pensions, retirement accounts, and foreign mutual funds. Simplifying entity structures is advisable. Certain accounts can be considered foreign trusts or PFICs, complicating US taxes. It is a good idea to discuss tax optimization, simplicity in entity structure, and compliance with a tax advisor.
Lodder CPA helps you reduce risk, improve efficiency, and ensure your structure supports how your business actually operates today — and where it’s going.
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