United States Tax Guide

Currency:   US Dollar

Foreign Exchange Control:   No general restrictions however sanctions and embargoes apply to certain countries and entities.

Accounting Principles:   US GAAP

Business Entities:  Principally, corporation, limited liability company, business trust, partnership and limited partnership.

Corporate Taxation:   Residence: If created or organised in the USA or under the laws of the USA.

Basis:  Resident companies subject to tax on worldwide income; non-resident companies are taxed on income connected with trade or business in the USA.

Rate:  Progressive rate from 15% – 35%

Foreign Tax:  Foreign income taxes can be offset dollar for dollar on foreign income if certain conditions are satisfied.

Other:   Deductions available for R&D and various other activities.

Tax Year:  Accounting year. Must end on the last day of any month.
Personal Taxation:

Residence:  Resident individual subject to tax on worldwide income with credits for foreign tax; non-resident individual only taxed on USA-source income and USA connected income (Resident if >183 days in a tax year. Can also be resident if spend cumulative time in the USA over a number of years).

Rate:  Progressive up to 39.6%

Capital Gains:  Minimum rate of 20% on net of long term gains against short term losses. Dividends also included.

Other:  Stamp duty: May be imposed by states.

Real property tax:  Imposed by local governments at various rates

Inheritance tax: Up to 40%

Social Security: 12.4% split between employer and employee. Additional Medicare contribution of 2.9%-3.8%

VAT:  Levied by individual states at varying rates

Member Firms: Downey & Company LLP and Gerber & Co Inc

Jamie Downey: jmdowney@downeycocpa.com
James Downey: jdowney@downeycocpa.com
Selwyn Gerber:  sg@gerberco.com
Richard Weisinger:  rw@gerberco.com