For many U.S. exporters, the Interest Charge Domestic International Sales Corporation (IC-DISC) is a cornerstone of their federal tax strategy. By converting high-rate ordinary income into tax-advantaged qualified dividends, the IC-DISC provides immediate permanent tax savings on export profits. However, as business owners scale their global operations, a common challenge arises: the “liquidity trap.” While […]
The 2026 tax year is a turning point for U.S. exporters. With the sunset of the Qualified Business Income (QBI) deduction, the value of the IC-DISC has reached a decade-high. By strictly adhering to IC-DISC rules, exporters can convert ordinary income (taxed up to 39.6%) into qualified dividends (taxed at 20% or 23.8%), securing a […]
The IC-DISC commission calculation has taken on renewed importance as several key provisions of the Tax Cuts and Jobs Act (TCJA) are scheduled to sunset in the coming years. Chief among them is Section 199A, which currently allows many pass-through exporters to deduct up to 20% of qualified business income. If Congress allows this provision […]
Exporting goods or services from the United States doesn’t just open the door to global markets; it also unlocks powerful tax-saving opportunities. In 2026, U.S.-based exporters can still take advantage of key federal incentives like the Interest Charge Domestic International Sales Corporation (IC-DISC) and the Foreign-Derived Intangible Income (FDII) deduction to reduce their tax liabilities […]
The Interest Charge Domestic International Sales Corporation (IC-DISC) is one of the most powerful tax incentives available to U.S. exporters, but only when it’s implemented and maintained correctly. Despite its benefits, many businesses unknowingly make costly mistakes in setup, compliance, reporting, or commission calculation, which can lead to disqualification, lost tax savings, or worse, IRS […]
The 1120-IC-DISC Schedule K is a required component of Form 1120-IC-DISC, the annual federal tax return filed by IC-DISCs to report export-related income and distributions to shareholders. For companies preparing their 2025 tax returns in 2026, Schedule K serves a critical role in documenting how profits are distributed, whether actually paid, deemed distributed, or deferred […]
The Interest Charge Domestic International Sales Corporation (IC-DISC) regime offers significant tax benefits for U.S. exporters, but it comes with strict compliance requirements. One area that often raises questions is how commissions paid by a related supplier to an IC-DISC can be satisfied, particularly through offsetting accounting entries. Treas. Reg. §1.994-1(e)(3)(ii) provides important guidance on […]
For U.S. exporters, the Interest Charge Domestic International Sales Corporation (IC-DISC) is a powerful but often underutilized tax savings tool. Originally enacted by Congress in 1971, IC-DISC remains the last significant federal tax incentive designed to support businesses that sell goods or services outside the United States. By leveraging IC-DISC, eligible companies can significantly reduce […]
If your business exports goods or services from the United States, you may be overlooking a powerful federal income tax incentive: the Interest Charge Domestic International Sales Corporation, or IC-DISC. Established by Congress in 1971, the IC-DISC remains the only statutory export tax incentive available today. It allows U.S. companies to reduce federal income taxes […]
If your company exports goods or services and you’re not taking advantage of the IC-DISC for U.S. Exporters, you’re likely missing out on substantial and legal federal tax savings. What is IC-DISC for U.S. Exporters? Why it matters: An Interest Charge Domestic International Sales Corporation (IC-DISC) is the only remaining federal export tax incentive in […]
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