US Tax Compliance for Business Travelers

1040 income tax form and w-2 wage statement with a federal Treasury refund check. Closeup with selective focusing.

US Tax Compliance for Business Travelers

If you frequently travel to the US for business, it’s imperative to know your tax obligations. Non-compliance with international tax laws can lead to penalties and negatively affect your future travel plans.

To help you avoid such outcomes, here are the most important things to know about US tax laws and visiting business travelers.

Applicable US Tax Laws for Business Travelers

1.      Federal Income Taxes

If you visit the US and do business for 90 days or more at a time, then you are subject to US federal tax laws. The same applies if you spend less than 90 days but earn over $3,000 while in the US. Note, however, that these stipulations do not apply if your country is party to a relevant income tax treaty with the US.

Countries with such treaties in place include Georgia, Canada, India, Indonesia, Israel, Australia, and Germany.

2.      Social Security Taxes

Even if your country of origin is party to an income tax treaty, the Federal Insurance Contributions Act (FICA) may require you to pay a separate international tax. Also known as the Social Security tax, you can expect to pay a FICA tax on any wages earned while in the US.

You may be exempt from FICA taxes if your country is party to a social security treaty or you get a certificate of coverage from your home country.

3.      State Taxes

Aside from federal tax laws, each US state has its own tax laws. In states where income tax treaties are not recognized, you will need to pay state taxes.

The state you are visiting may also have other laws that require you to pay taxes. In most states, tax requirements become active as soon as you enter the state. To be safe, verify the rules of the state you are visiting before you arrive.

What About US Businesses Operating Abroad?

A US citizen or incorporated company with over 50% ownership of a foreign-based business has to pay a GILTI (Global Intangible Low-Tax Income) tax to the US.

Do You Need Help with International Tax Obligations?

Whether you are a US citizen or company that does business abroad, or just a visitor doing business in the US, navigating the many tax laws can be dizzying. Avoid the dangers of being non-compliant with tax laws by contacting MKS&H for international tax services.

We have years of experience collaborating with local and foreign-owned businesses in various industries. We can protect your interests by helping you navigate International Financial Reporting Standards (IFRS), Generally Accepted Accounting Principles (GAAP), and other relevant US tax laws.

Contact us today for an initial consultation and discover how we can help you fulfill your tax obligations.

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MKS&H is committed to providing personalized tax and accounting services while developing a deep understanding of you, your culture, and your business goals. Our full view of financial systems and the people behind them allow us create and evolve the best solution that will help you and your business thrive. The accounting experts and consulting professionals at MKS&H work together to help you achieve the financial results you want.

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