International Tax Preparation Services
If you relocate to another country or your business starts operating internationally, you may require international tax preparation services to manage a newly complex tax situation. Organizations that operate internationally can face a wide range of challenges, including a global tax burden, supply chain disruptions, evolving reporting standards and global trade and regulatory complexities.
International tax compliance can be complex. U.S. and global tax professionals can offer a holistic, efficient and technology-driven view of your tax liability. With a focus on international tax preparation and assistance from an international tax consultant, your business can mitigate compliance risk and pursue strategic growth.
Frequently Asked Questions and Answers for International Taxes
If you believe you may need to complete international tax filing, you’ll likely want to know about tax breaks and relevant tax codes. At SD Mayer, we want to help you understand how your foreign bank account or foreign financial assets may affect your tax liability. Here are some of the most frequently asked questions we receive regarding international taxes.
1. Who Needs to File International Taxes?
Both individuals and businesses may need to file international taxes. If the following applies to you, you may need to file these taxes:
- You are an international student.
- You are a dual citizen in the U.S. and another country.
- You own a business outside of the U.S.
- You own property outside of the U.S.
- You have a foreign bank account.
- You have investments outside of the U.S.
Both American citizens and U.S. resident aliens may have to pay international taxes if they receive earned income abroad. If you travel abroad frequently and manage your finances and business between countries, you may want to hire a tax preparer who can handle your taxes for you.
2. What Tax Forms Are Usually Needed to Remain Compliant?
Here are some of the forms most commonly needed to stay compliant with international taxes.
- Form 72, Quarterly Federal Excise Tax Return
- Form 56, Notice Concerning Creation of Termination of a Fiduciary Relationship
- TDF 90-22.1, Report of Foreign Bank and Financial Accounts
- Form 926, Return by U.S. Transfer of Property to a Foreign Corporation
- Form 1040-B Part III, Information Regarding Foreign Accounts or Trusts
- Form 673, Statement for Claiming Exemption From Withholding on Foreign Earned Income
- Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return
- Form 1116, Foreign Tax Credit (Individual, Estate, or Trust)
- Form 1118, Foreign Tax Credit — Corporations
3. Can I Claim the Foreign Tax Credit?
The foreign tax credit offsets the income tax you paid abroad, so if you are a U.S. citizen or resident alien, you may be able to claim this credit if you paid income taxes imposed by another country. When you claim this credit, you can avoid paying taxes twice on the same taxable income. For foreign taxes to qualify for this credit, you typically must have paid them on:
4. What Does an International Tax Consulting Group Do?
An international tax consulting group is a professional services firm that provides expert advice and guidance to individuals, corporations and organizations on international tax matters. A tax consulting group’s primary focus is helping clients navigate complex international tax laws and regulations to minimize tax liabilities and maximize profits.
As this type of consulting group, some of the specific international tax planning services we can provide include:
- Compliance services: Compliance services ensure your business complies with all of the relevant international tax laws and regulations, including filing requirements, transfer pricing rules and tax treaties.
- Tax planning services: An international tax consulting group may also offer tax planning services that can help you develop tax-efficient strategies for your cross-border business operations, such as mergers and acquisitions, joint ventures and international expansions. We can help you apply for and secure a U.S. tax identification number (TIN), which the Internal Revenu Service (IRS) uses to identify you as a taxpayer.
- Tax optimization services: Your international tax consulting group may identify opportunities for you to take advantage of tax incentives, exemptions and credits in different countries to reduce your overall tax burden, helping you fulfill your tax obligations.
- Dispute resolution services: We can also represent you in tax disputes with foreign tax authorities, including negotiating settlements and challenging tax assessments.
- Training and education services: We can provide training and education on international tax issues and help you stay up to date on changes in tax laws and regulations around the world.
An international tax consulting group can help you navigate the complex world of international taxation, ensuring that you comply with all applicable laws and regulations while minimizing your tax liabilities and maximizing your profits.