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Tax benefits for exporters

February 13, 2014 / 1 min read

The U.S. tax code contains a number of incentives for desirable activities that U.S. taxpayers can engage in.  Some of the incentives can come and go at the whim of Congress, like the research & development credit, but the one incentive that has remained relatively unchanged since 1971 is a benefit for U.S. exporters.  That benefit reduces the effective tax rate on export profits by up to 10 percent by converting ordinary income into qualified dividends.

To illustrate how the benefit works, please refer to this example:

While the mechanics may look complicated, running the DISC is quite easy.  To claim the benefit, the taxpayer must:

If you are an exporter that wants to reduce your effective tax rate on export sales, a DISC is a proven strategy that can help you meet your goal.

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