Philip D. W. Hodgen is the principal attorney of HodgenLaw PC, an international tax law firm based in Pasadena, California. He earned his undergraduate degree from Claremont McKenna College and his law degree from the School of Law at the University of California, Los Angeles. He then went on to earn a Master of Laws degree with a specialty in taxation from the University of San Diego School of Law. Admitted to the California bar in 1982, Phil spent nine years in law firms and with a large U.S. bank before starting his own firm in 1991.
Phil is a past chair of the International Tax Committee of the State Bar of California's Tax Section and was a member of the Executive Committee of the State Bar of California's Tax Section for 2004-2007. Phil frequently speaks on a variety of international tax, trust and estate topics to attorneys, accountants, and real estate professionals.
This week’s episode is about Social Security tax and self-employment tax, and it tells U.S. citizens and green card holders living and working outside the United States how to not pay those taxes.
Hacker News and Dynamite Circle people (I participate at both places and get frequent tax-related emails from people active in both of them, so this week’s episode is for you) understand that there are good reasons to form a corporation outside the United States in order to do business. Local laws, banking, and visa considerations are three good reasons. There are a ton of dumb reasons, too.
Consider the following scenario, which is useful for a U.S. person living and working abroad as a freelancer, independent contractor, or self-employed person. You may be a digital nomad, perhaps. But this idea will work for any self-employed person or business owner abroad…
This is part of the Brains Across Borders series – where I talk about tax problems that pop up when the person doing the work is in one country, and the person getting the work done is in another country. And one of those countries is the United States.
This episode looks at one of the burdens on U.S. employers who hire foreign freelancers, and the interesting problem of how you prove that you don’t have to do anything. It’s stressful to be fairly sure you don’t have to do something, but then that little voice in the back of your head keeps second-guessing you…
Our clients are wealthy individuals and families. People.
Even people who own U.S. real estate.
This episode of the Friday Edition is about an investment risk that pretends to be a tax problem. Sometimes this investment risk is best managed with ideas from a tax lawyer. But not always.
Let’s imagine a future risk. Five years from now you will be sued. Extremely generic business litigation. Nothing special, except if you lose the lawsuit your company will be wiped out. High stakes, normal risk.
You will be considerably less stressed as you go through the lawsuit if you know that a few million dollars sits in a bunker, safe, waiting for you after the dust has settled – even if you lose the lawsuit.
How do you go from cocktail party conversation to done? Today I am going to cover the first hurdle. You can’t move forward until you solve this hurdle.
Saturday morning in Singapore I will be talking to about 30 entrepreneurs about tax stuff – a bit for themselves, but mostly about their businesses. And that means talking about cross-border tax strategies. “Can I do what Apple does?”
The answer is yes. It’s just not cost-effective until you are operating at scale. For younger companies, the better strategy is to optimize for simplicity. Spend less money on tax brains and pay a bit more in tax. Stay away from the shiny.
Simplicity will make your business nimble, and your time and attention will be directed toward what really matters: creating customers. An entrepreneur’s time and attention is worth far more than taxes saved.
You don’t get wealthy by paying less tax. You get wealthy by creating customers. Look at Apple. Of course Apple is saving tax with clever international tax strategies. But first, painfully and over a long time, they created customers.
The Passive Foreign Investment Corporation and Controlled Foreign Corporation rules are the government’s countermeasures against a logical tax strategy–tax deferral.
If your business operates through a foreign corporation … you probably have a latent Passive Foreign Investment Corporation on your hands, or (“less bad”) you probably have a Controlled Foreign Corporation.
Tax laws change over time, and the information in this post above may be less accurate today than it was at the time of the last revision. This post is not tax advice for your specific situation. Please contact an international tax professional to get personalized advice for your situation.