So, you’re ready to take your business to the U.S.? Exciting move! A bigger market, new customers, and endless opportunities—but also, let’s be honest—a whole new world of taxes. If you’re used to a streamlined system (like in the UK), the U.S. tax structure might feel like a maze.
Before you dive in, let’s break down what you need to know about corporate taxes, payroll, sales tax, and compliance so you can expand smoothly, stay IRS-compliant, and keep more of your money.
U.S. Taxes vs. UK Taxes: What’s Different?
If you’re coming from the UK, you’re used to a centralized tax system—HM Revenue & Customs (HMRC) handles everything from corporate tax to payroll deductions. The U.S.? Not so much. Here, you’ll deal with federal, state, and sometimes even local tax laws, all with different rules and rates.
1. Corporate Tax: Federal vs. State (Yep, You Have Both!)
- The S. has a flat 21% federal corporate tax, but states can add their own on top (ranging from 0% to 10%+).
- The UK? A single corporate tax rate of 25% for large businesses and 19% for smaller ones—much simpler!
What this means for you: Choosing the right state to operate in can save you thousands. For example, Texas has no state corporate income tax—one reason why so many businesses choose Austin. A CPA in Austin, Texas, can help you pick the most tax-friendly structure for your expansion.
2. Payroll Taxes: Who Pays What?
- In the U.S., employers must withhold federal and state income taxes, plus Social Security (6.2%) and Medicare (1.45%) and match these payments.
- The UK’s National Insurance Contributions (NICs) are simpler, with set percentages for employers and employees.
What this means for you: If you’re hiring a U.S. team, payroll taxes are non-negotiable. A small business CPA in Austin will ensure you withhold correctly and avoid costly missteps.
3. Sales Tax vs. VAT: Completely Different Ball Game
- The UK has Value-Added Tax (VAT), included in prices at a flat 20% rate.
- The U.S. has sales tax, which varies by state and even city ranging from 0% to over 10%.
What this means for you: If you’re selling products or services in the U.S., you may need to collect sales tax in multiple states. A tax advisor in Austin will help you set up the right systems so you don’t get caught in a compliance nightmare.
Taxes You’ll Need to Stay on Top Of
Unlike the UK’s annual tax payments, the U.S. operates on a quarterly system. That means you need to estimate and pay taxes every three months—miss a deadline, and the IRS will gladly charge you penalties.
1. Quarterly Tax Payments: The U.S. “Pay-as-You-Go” System
- Taxes are due four times a year (April, June, September, and January).
- If you don’t pay enough throughout the year, the IRS will hit you with penalties.
What this means for you: A CPA firm in Austin, Texas, can help you calculate your quarterly tax payments so you don’t pay more (or less) than you should.
2. What Can You Deduct? Maximizing Tax Write-Offs
The good news? The U.S. offers a ton of business deductions to lower your taxable income:
✔ Office expenses and rent
✔ Employee salaries and benefits
✔ Business travel and meals
✔ Marketing and advertising
✔ Depreciation on assets
What this means for you: Work with an Austin tax accountant to make sure you’re taking full advantage of deductions and keeping solid records to back them up.
3. U.S. Tax Filings You Can’t Ignore
Depending on your business structure, you’ll need to file:
- Form 1120 (Corporate Tax Return) – If operating as a C-Corp
- Form 1065 (Partnership Tax Return) – If expanding as a partnership
- State Business Tax Returns – Varies by state
- Sales Tax Filings – Required if you sell taxable goods/services
What this means for you: An Austin, TX accountant will handle all your filings so you don’t have to deal with IRS headaches.
Your U.S. Expansion Tax Roadmap
Before expanding, make sure you:
- Choose the Right Business Structure – LLC? S-Corp? C-Corp? The right setup can save you big on taxes.
- Pick a Tax-Friendly State – Some states (like Texas) have no corporate income tax.
- Set Up Payroll & Sales Tax Compliance – Avoid fines and legal issues from day one.
- Plan for Quarterly Taxes & Deductions – CPA firms in Austin, Texas will ensure you’re maximizing tax benefits.
- Work With a U.S. CPA Who Specializes in International Business – Don’t try to figure this out alone!
Plan Your U.S. Tax Strategy Before You Expand
The U.S. market is full of opportunities but mismanaging taxes can cost you big time. Whether it’s corporate tax planning, payroll compliance, or sales tax setup, Insogna CPA has your back.
Expanding soon? Let’s make sure your tax strategy is airtight. Schedule a consultation today!