U.S. TAX GUIDE IN FRANCE
How can American business owners in France simplify IRS filings?
Yes, American entrepreneurs running businesses in France can simplify their US tax filings. Typically, foreign corporation filings are complex, but electing the foreign corporation as a flow-through entity can streamline this process.
How does electing a foreign corporation as a flow-through entity work?
File Form 8832 to treat the foreign corporation as a disregarded entity. This change allows income and expenses to be reported on Schedule C of Form 1040, avoiding complex foreign corporation filings.
What additional forms are needed?
In addition to Schedule C, you must file Form 8858, the Foreign Disregarded Entity Form, with your tax return.
Does this method affect self-employment taxes?
Yes, the totalization agreement between the US and France exempts you from paying US Social Security and Medicare taxes. These are instead paid to the French system, avoiding double taxation.
How can American entrepreneurs find out if they can use this tax strategy?
Consult a tax professional familiar with both US and French tax systems to ensure compliance and maximize benefits while minimizing legal complexities.
