Our Tax Services are designed to take care of your Puerto Rico tax filings, while making sure you don’tfall out of compliance back inthe U.S.Is it true that I do not have to pay income taxes to the IRS after becoming a bona fide resident of Puerto Rico?No. If you become a bona fide resident of Puerto Rico, you are only exempt from federal income taxoveryour income derived from sources within Puerto Rico (except income as a U.S. Federal Employee). You arestill liable to pay payroll taxes on your Puerto Rico source income. Also, if you generate income fromsources outside Puerto Rico, you are (generally) liable to pay federal taxes to the IRS

Yes. If your worldwide income is $75,000.00 or more and you relocate to the U.S. Territory of Puerto Rico, you are required to file with the IRS a “Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession” (IRS Form 8898). This form is filed by itself, on or before the due date for filing Form 1040 or Form 1040NR of the year following the relocation to Puerto Rico.

No. The only amounts that can be reported as “Salary” on a Puerto Rico Income Tax Return are employee compensation reported on either Form 499R-2/W-2PR or a Form W-2 issued by the U.S. Federal Government. If the form W-2 was not issued by the U.S. Federal Government, it must be reported as “Other Income” on a Puerto Rico Income Tax Return.

Yes. If you are required to pay both Puerto Rico income taxes and Income Taxes in the U.S., you may be able to claim a Federal Tax Credit from income taxes paid to the Puerto Rico Treasury Dept. on your IRS Form 1040. The tax treatment varies at the state level.

No. If you become a bona fide resident of Puerto Rico, you are only exempt from federal income tax over your Puerto Rico source income; this does not apply to U.S. Federal Employees. Even if you are a bona fide resident of Puerto Rico, you are still liable to pay payroll taxes on your Puerto Rico source income, your U.S. source income and your foreign source income.

Yes. If you are the type of taxpayer that generate income from non-payroll sources, both the IRS and the Puerto Rico Treasury Dept. will rely on you (the taxpayer) to determine your net income for tax purposes. If you do not maintain accounting records, you could expose yourself to a situation where either the IRS, the Puerto Rico Treasury Dept. or both estimate your net income for you during an audit and impose taxes based on that estimated net income, a less than desirable situation for any taxpayer.

No. If you don’t know who owes you money and who you owe money to, you have no business. Improper accounting records are one of the prevailing reasons why most businesses either go bankrupt or stagnate. Without proper accounting, you will simply lack the required information to take even the most basic decisions regarding your business; including if you should keep investing in a certain business at all.

No. In order to maintain an accounting system that reflect your needs, you first must evaluate which accounting software you require. Not all accounting platforms are the same. Second, you need to configure the chosen accounting software to your particular business operations.

No. There is not even a requirement to retain an outside accountant to take care of your books. However, bookkeeping is a delicate and time-consuming process and every hour devoted to the accounting of your business is an hour not devoted to growing your business.

No. There is no requirement by either the IRS or the Puerto Rico Treasury Dept. to maintain an official business budget. However, without a proper budgeting process, you will not have a tool to measure your performance against expected financial results. Which in turn, will increase the probability of running out of cash and ending up in bankruptcy court.Your Content Goes Here

Yes. On 2015, the U.S. Government approved a law titled “The Fixing America’s Surface Transportation Act”, also known as The FAST Act. This law authorizes the U.S. State Dept. to revoke the U.S. passport from anyone who owes more than $50,000.00 in taxes to the IRS.

Yes. On 2010, the U.S. Government approved a law titled the “Foreign Account Tax Compliance Act”, also known as FATCA. This law authorizes the U.S. Treasury Dept. to imposed financial penalties to non-U.S. financial institutions who do not report ownership and control information regarding the assets held by their U.S. clients. In order to avoid sanctions by the U.S. Federal Government, financial institutions around the world began to the financial information of their U.S. clients without even informing this situation to the U.S. owners of these foreign financial accounts.

Yes. On 1970, the U.S. Government approved a law titled the “The Bank Secrecy Act of 1970”, also known as BSA. This law authorizes the U.S. Treasury Dept. to impose harsh monetary civil penalties for non-willful violations; however, it authorizes the U.S. Justice Dept. to seek criminal sanctions against willful non-compliance.

Yes. The obligation to file a “Report of Foreign Bank and Financial Accounts” (FinCEN Form 114) and a “Statement of Specified Foreign Financial Assets” (IRS Form 8938) are completely independent from having a tax filing obligation in the U.S.

Yes. U.S. citizens and Green Card Holders may be required to report to the U.S. Federal Government the information regarding financial assets located outside the U.S. if they have signatory control of the assets, a financial interest over the assets or if certain other situations apply.