Advice on complex situation?

#1:I currently live in France but will be moving and working in NYC by the end of the year (got married to a US citizen + getting Green Card). I have a full time job starting soon in the US.I also have a company here in France doing business online (selling software), with clients mainly in Europe (no U.S. clients). I do not technically own the company (no shares) and I am not an employee, so I have been paying myself by charging "management fees" through another French company (good legal way to optimize taxes here).
#2:Now that I am moving to the US, I would like to choose the new best US structure to combine my employee salary and the income I can withdraw from my French company.
What would be your advice on that? Do keep in mind that I am discovering the US legal and tax systems, and that I am not necessarily planning on staying in the US for the rest of my life.
#3:I have explored a bit the following topics:
- US tax rules (especially the fact that here we are taxed on our worldwide incomes)
- the advantages of writing off expenses in the US
- incorporating in Delaware, offshore, or in NYC
- the different corporations you have in the US (C, S, LLC, etc)
- the difference between paying myself in salary or dividend
I tend to think that, since I have a total freedom of place where to incorporate and since I am living in a country where the original company is not doing any business, there might be a clever way to optimize the situation.
I currently see 2 main "overall strategies":
- incorporate in a "tax heaven", and charge French company (transfer intellectual property and transfer royalties? Or just management fees?). The offshore company would pay 0% taxes and I would pay myself dividends. So 15% overall tax rate?
- incorporate in US (NYC, Delaware?) and charge the French company. Write off a max of expenses (portion of rent, utilities, etc.). Pay myself (dividend, salary?). So higher taxes, but less taxable incomes? Would the company pay federal/local taxes since it would not do any business in the US?

Answer :

#1:As a US person, as a US resident, you are subject to US taxes on your US source and world wide income that you earn in France.As long as you pay tax(es) to French taxing authority(ies) on your income that you earn in France, you have a choice as to whether you deduct any foreign taxes paid or accrued during the year as an itemized deduction on your Form 1040 Sch A or as a credit using Form 1116. The choice needs to be made each year that you have foreign taxes and it can change from year to year. While you can choose whether to use a credit or a deduction year to year, you can't use some as a credit and some as a deduction in the same year. The IRS recommends filling out your taxes both ways to see which one provides you with the most benefit. Not all foreign taxes qualify to be used as a credit. Generally, only foreign income taxes can be used as a credit on your U.S. taxes. All other taxes can be used as a deduction. While the general rule is that you can mix and match foreign tax credits and deductions in the same year, there is an exception. If the foreign taxes were incurred in a trade or business or in the production of income, the taxes can be deducted even if you took the tax credit for foreign income taxes. You can change your choice as to..Read more..