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IC-DISC

Get the Most from IC-DISC Tax Benefits

Owner-managed exporting businesses can recoup - or even exceed - their tax savings by creating an interest charge-domestic international sales corporation (IC-DISC.) The IC-DISC is not a tax shelter. It provides a permanent 10-20% tax savings for qualifying U.S. exporters.

To get the most out of an IC-DISC, including maximum tax savings, businesses should seek assistance from a qualified tax advisor with significant international tax and business planning experience. Freed Maxick can tailor our services to your needs – so you can get back to business.

HOW IT WORKS

Step 1

Owner-managed exporting entity creates a tax-exempt IC-DISC

Step 2

Exporting entity pays IC-DISC a commission

Step 3

Exporting entity deducts commission from ordinary income which could be taxed at up to 39.6%

Step 4

ICDISC pays no tax on the commission

Step 5

Shareholders pay income tax on dividends at the capital gains rate of 20%

Step 6

Result is 20% tax savings on commission

IC-DISC Advantage and Benefits

  • IC-DISC shareholdings can be used in a number of ways to help achieve business goals and objectives.
  • Increased liquidity for shareholders or the business to redeploy in other areas
  • Permanent tax savings on global sales
  • Ability to leverage cost of capital
  • Opportunities to create management incentives
  • Means to facilitate succession or estate planning

Your Expert

William S. Iannarelli, CPA

Director

Are you looking for IC-DISC Tax Services from a New York CPA firm?

If so, simply fill out the form below or call us at 716.847.2651 for more information.