Income and Distributions

(Planning for payments that cross a US border)

Because US rules often tax the income earned by different entities at different rates (see Forming a US Entity?), and often tax different types of income at different rates, planning for income and distributions that cross a US border is essential.

For example, US recipients of cross-border dividends are taxed at beneficial rates under certain circumstances; while US recipients of cross-border trust distributions are often taxed at heavy rates (see Foreign Trust?).

On the other hand, non-US recipients of income from the US typically face a variety of US withholding tax rates depending on the type of income – especially if they reside in a country with which the US has a tax treaty (see Tax Treaty Question?).

If the income is paid by a party who is related to the recipient, planning is then aimed at global tax efficiency, taking account of the overall tax inclusion and tax deduction rates of both parties.

If you want an answer or assistance with income and distributions, complete the Basic Information Questionnaire and follow Our Process.