From the desk
Notes on Act 60, residency, and the file.
The same questions that come in on consults — written down. Forty-seven pieces from the Bonn LLC desk.
May 14, 2026
“Rent vs. Buy” — la gente discute este tema TODO el tiempo…
Pero la mayoría nunca hace los números completos.Especialmente en Puerto Rico. Muchos ven esto: Y automáticamente dicen: ✅ “Mejor compro porque pago lo mismo.” 🚨 Ahí es donde MUCHOS fallan. Porque en Puerto Rico, el pago de hipoteca NO es el costo real total de vivir en esa propiedad. La mayoría de las personas solamen
FAQ
September 16, 2025
Are You Ready for an IRS Audit as a Puerto Rico Resident Under Act 60?
Moving to Puerto Rico to take advantage of the benefits under Act 60 can be a game-changer for entrepreneurs, investors, and professionals. But with the IRS increasing its focus on residency and sourcing of income, residents must be prepared for a potential audit. At BONN LLC, we help our clients stay audit-ready by ke
Notes
August 28, 2025
Navigating Act 60 Revocation Risks in Puerto Rico
Act 60 (now Act 60-2019) provides attractive tax incentives for businesses and individuals relocating to Puerto Rico, but maintaining compliance is crucial. Revocation of these benefits can have significant financial implications. Below, we outline the primary reasons for revocation, based on official guidelines from t
Compliance · Tax Incentives · Tax Tips · Taxes
July 23, 2025
Frequently Asked Questions on Section 2021.02 of Law 60-2019 for Hard-to-Recruit Professionals
IntroductionUnder Section 2021.02 of Law 60-2019, hard-to-recruit professionals who provide essential knowledge and skills for the operations of an exempt business can access tax benefits. This section aims to attract highly qualified individuals crucial to the business’s success. The filing fee for Professionals of Di
Notes
April 17, 2025
Best Practices for Self-Auditing Tax Compliance When Moving from the USA to Puerto Rico
Relocating from a U.S. state to Puerto Rico to take advantage of tax incentives, such as those under Act 60, requires careful planning to ensure compliance with IRS requirements for bona fide residency. To qualify as a bona fide resident of Puerto Rico, you must satisfy three tests: the Presence Test, Tax Home Test, an
Doing Business · Relocation · Tax Incentives · Tax Tips · Taxes
February 23, 2025
3 Tax Exemptions You Should Know in Puerto Rico: Life Insurance, Gifts, and Injury Compensation
Did you know that not all income you receive in Puerto Rico is taxable? The Puerto Rico Internal Revenue Code offers exemptions that can save you money, but they come with specific rules. Today, we’ll dive into three common ones: life insurance payouts, gifts and inheritances, and compensation for injuries or illnesses
Tax Tips · Taxes
February 18, 2025
Should You Be a 1099 Contractor or W-2 Employee Under Puerto Rico’s Act 60? A Comprehensive Guide
If you’re considering a move to Puerto Rico to take advantage of the tax incentives under Act 60, one of the most common questions you’ll face is: Should I structure my work as a 1099 independent contractor or stick with W-2 employment? This decision can significantly impact how you leverage Act 60’s benefits, as well
Compliance · Relocation · Tax Incentives · Tax Tips · Taxes
February 12, 2025
Act 22 Compliance Checklist: Stay on Track and Protect Your Tax Benefits
Puerto Rico’s Act 22 (now part of Act 60) provides significant tax benefits to Resident Individual Investors. However, these benefits come with strict compliance requirements. Failing to meet these obligations can result in revocation of benefits and financial penalties. Below is a checklist to help ensure you stay in
Compliance · Tax Incentives · Tax Tips · Taxes
January 29, 2025
¿Tienes Derecho al Crédito por Trabajo en Puerto Rico? Usa Nuestra Calculadora y Descúbrelo
El Crédito por Trabajo es un incentivo diseñado para ayudar a los trabajadores de ingresos bajos y moderados en Puerto Rico. Este beneficio podría representar un alivio económico importante para muchas familias, pero no todos saben si cualifican o cuánto podrían recibir. Para facilitarte el proceso, hemos creado una ca
Tax Incentives · Tax Tips · Taxes
December 23, 2024
Have You Checked If Your Act 22 or Act 60 Tax Grant Requires These Key Points?
For investors benefiting from Puerto Rico’s tax incentives under Act 22 or Act 60, compliance with the terms of the grant is crucial to maintaining eligibility for the program’s benefits. While each grant represents a separate contract negotiated individually with the Puerto Rican government, there are common complianc
Notes
December 20, 2024
Does My YouTube Channel’s Source of Income Qualify for Act 60 Export of Services?
If you’re a YouTube creator wondering whether your ad revenue can qualify under Puerto Rico’s Act 60 for Export of Services, here’s what you need to know: Understanding Act 60 Act 60 in Puerto Rico was designed to attract businesses by offering significant tax incentives, particularly for those providing services to cl
Doing Business · FAQ · Tax Incentives · Tax Tips · Taxes
December 11, 2024
Tax Implications for MLB Players: California, New York, and the Juan Soto Phenomenon
In the world of Major League Baseball (MLB), the geographical location of a player can significantly affect their earnings, not just in terms of salary but in how much of that salary they get to keep after taxes. This post will delve into the tax implications for baseball players, particularly focusing on how contracts
Tax Tips · Taxes
November 18, 2024
Navigating the IRS Audit Maze: 15 Red Flags to Watch Out For
Filing your taxes is a meticulous process, one where precision not only ensures compliance but also minimizes the risk of an audit. The Internal Revenue Service (IRS) employs various methods to select returns for examination, often focusing on inconsistencies or unusual patterns that could suggest discrepancies or erro
Compliance · Tax Tips · Taxes
November 12, 2024
DIY Audit: A Guide to Keeping Your Act 20 and Act 60 Compliance on Track
If you’re benefiting from Puerto Rico’s Act 20 or Act 60 tax incentives, staying on top of compliance is crucial. Missed deadlines or overlooked requirements can lead to penalties, loss of tax benefits, or even revocation of your grant. Here’s a step-by-step guide to conducting a DIY compliance audit to help you manage
Notes
November 11, 2024
Fuentes de Ingresos Exentas en Puerto Rico: Guía Completa para Aprovechar las Exenciones
En Puerto Rico, ciertos tipos de ingresos están exentos de impuestos, lo que puede reducir significativamente la carga fiscal de los contribuyentes. Aquí exploramos las principales fuentes de ingresos exentas, los porcentajes de exención aplicables, y los requisitos necesarios para calificar. ¡Sigue leyendo para descub
Notes
November 1, 2024
Understanding Puerto Rico’s Taxpayer Bill of Rights: What Every Taxpayer Should Know
Navigating tax obligations can be complex and sometimes overwhelming. To ensure that all taxpayers in Puerto Rico are treated fairly and with respect, the Department of Hacienda (Puerto Rico’s Treasury Department) has established a Taxpayer Bill of Rights. This document outlines both the rights and protections for taxp
Taxes
October 30, 2024
How Non-Residents Can Request a Refund of Withheld Taxes on Property Sales in Puerto Rico
Selling property in Puerto Rico as a non-resident can come with some unique tax obligations. One of the most significant is the withholding tax applied to sales of real estate or shares located in Puerto Rico. However, if you meet certain requirements, you may be eligible to request a refund of that withheld tax. Here’
Notes
October 22, 2024
Latest Benefits of Act 60 for Investors in Puerto Rico: What You Need to Know
Are you considering leveraging the lucrative tax incentives offered under Puerto Rico’s Act 60? If so, you’re on the path to potentially significant tax savings, but navigating this terrain requires careful planning and thorough understanding. Here’s a comprehensive guide based on the latest drafts from our office: 1.
Compliance · FAQ · Relocation · Tax Incentives · Tax Tips · Taxes
September 9, 2024
Debunking the Myth: Can You Really Save on Taxes by Paying Yourself?
In the world of business ownership, tax strategies can be complex and sometimes misleading, especially when it comes to the advice shared by social media influencers. One popular claim is that you can save money on taxes by paying yourself as a business owner. But is this really true? Let’s dive into the details to cle
Compliance · Deductions · Doing Business · Tax Tips · Taxes
September 9, 2024
How Much Should You Pay Yourself as a Business Owner of an Entity?
As a business owner, you invest a lot of time and effort into making your business successful. But how do you determine how much to pay yourself for all the work you do? This is an important question, especially if you own an entity, where you have the flexibility to decide your own compensation. In this article, we’ll
Compliance · Deductions · Tax Tips · Taxes
August 7, 2024
8 Tax Myths Busted
“Filing taxes is voluntary”: This statement is misleading. While it is true that the IRS does not have the authority to force you to file a tax return, the tax code itself is mandatory. If you meet the income thresholds, you are required to file a tax return. Failure to file can result in penalties and interest charges
Notes
May 3, 2024
Protect Yourself: Avoiding the IRS “Dirty Dozen” Tax Scams
Every year, the IRS releases its “Dirty Dozen” tax scam list, a compilation of scams that fraudulent individuals use to target taxpayers. While many of us aren’t actively seeking out these scams, it’s crucial to stay informed and vigilant to avoid falling victim. In this article, we’ll delve into some common schemes an
News · Tax Tips · Taxes
April 12, 2024
Dramatic Consequences of Student Loan Forgivenes
Student loan forgiveness can offer relief to borrowers burdened by educational debt, but it’s essential to understand that forgiveness isn’t always free from tax implications. While some forgiveness programs provide relief without tax consequences, others may leave borrowers facing unexpected tax bills. Let’s delve int
News · Tax Tips · Taxes
March 29, 2024
Maximizing Tax Savings: The Power of Health Insurance for Business Owners
In the intricate landscape of financial management for business owners, certain elements often stand out as linchpins to success. One such element, frequently underestimated in its dual capacity, is health insurance. For business ownerss, understanding the nuanced relationship between health insurance and tax benefits
Deductions · Doing Business · Tax Tips · Taxes
March 29, 2024
When should I switch to an S-Corp
It is generally recommended to switch to an S-Corp when the tax savings outweigh the additional costs and administrative burdens associated with the S-Corp status. This usually happens when your business’s net income reaches a certain threshold, typically around $40,000 to $50,000 per year. The primary benefit of an S-
Deductions · Doing Business · Tax Tips · Taxes
January 11, 2024
Why it’s important for companies to properly classify their workers as employees or independent contractors, as misclassification can lead to legal and tax issues?
Misclassifying workers as independent contractors when they should be considered employees, or vice versa, can lead to various legal and tax issues. Here are some of the potential problems that may arise: 1. Tax implications: – Employees have income taxes, Social Security, and Medicare taxes withheld from their paychec
Notes
December 19, 2023
Potential last-minute and year-end not-so-common write-off ideas for businesses
While tax regulations can vary, here are some potential last-minute and year-end not-so-common write-off ideas for businesses. However, it’s crucial to consult with a tax professional to ensure compliance with current tax laws and regulations in your jurisdiction: Remember, tax laws are complex and subject to change. I
Deductions · Doing Business · Tax Tips · Taxes
December 18, 2023
Navigating Corporate Transparency Acts: Compliance in Puerto Rico and the United States
The landscape of corporate transparency has undergone a significant transformation with the enactment of the Corporate Transparency Act (CTA) in the United States on January 1, 2024. This federal law mandates certain companies to furnish detailed information to the United States Department of the Treasury, emphasizing
Compliance · Doing Business · News · Tax Tips · Taxes
November 21, 2023
Navigating Compensation Regulations for Entities in Puerto Rico: A Brief Guide
In the vibrant business landscape of Puerto Rico, entities, encompassing corporations and partnerships, operate within a framework of specific tax regulations that shape various aspects of their financial structure. One crucial facet that business owners and stakeholders need to navigate is the concept of “reasonable c
Compliance · Deductions · Doing Business · Relocation · Tax Incentives · Tax Tips · Taxes
November 21, 2023
Maximizing Financial Success: The Strategic Role of Reasonable Compensation Analysis
In the intricate realm of financial planning and compliance, understanding the nuances of reasonable compensation emerges as a pivotal factor in positioning our clients for success. Beyond its immediate impact on retirement planning, the significance of reasonable compensation analysis extends to various facets of tax
Doing Business · Tax Tips · Taxes
October 25, 2023
“Essential Documentation for Claiming the Child Tax Credit: A Guide for Puerto Rico Residents”
When tax season arrives, it’s crucial for residents of Puerto Rico to be well-prepared and informed about the necessary documentation before filling out their Federal tax returns, particularly when claiming the child tax credit. In this article, we will guide you through the important documents and steps to ensure a sm
Compliance · Taxes
October 20, 2023
Home-Office Tax Strategy Guide: A Step-by-Step Plan for Maximizing Your Tax Benefits
Working from a home office has become increasingly common, with remote work arrangements on the rise. Whether you’re a full-time remote worker, a freelancer, or a small business owner, your home office can provide significant tax benefits. In this comprehensive step-by-step guide, we’ll walk you through the process of
Compliance · Deductions · Doing Business · FAQ · Tax Tips · Taxes
October 20, 2023
The Benefits and Considerations of Putting Your Children on the Payroll
Hiring your children and putting them on the payroll can be a strategic and financially savvy move, provided it’s done legally and for legitimate work. This practice offers several advantages for both parents and their children, ranging from tax benefits to valuable life lessons. In this article, we explore the benefit
Compliance · Doing Business · FAQ · News · Tax Tips · Taxes
October 20, 2023
Strategies to Offset Earned Income and Reduce Your Tax Liability
Earned income, which includes wages, salaries, and self-employment income, is subject to taxation. However, there are numerous strategies, deductions, and tax credits available to help you offset earned income and reduce your overall tax liability. In this article, we’ll explore a variety of methods to optimize your ta
Compliance · Doing Business · News · Taxes
September 22, 2023
Puerto Rico offers incentives to young doctors to stop the brain drain
Doctors who qualify for the incentives can now receive an income tax exemption on the first $500,000 of their taxable net income, a total exemption from property tax on personal property, and an exemption from municipal taxes for a period of three years.
Doing Business · News · Tax Incentives · Taxes
September 16, 2023
Puerto Rican residents to report their Foreign Financial Accounts (“FFA”)
The Law 52-2022 added Section 1061.25 to the Puerto Rico Internal Revenue Code of 2011, as amended (“Code”), to require all Puerto Rican residents to report their Foreign Financial Accounts (“FFA”) in which they have a financial interest. This requirement became effective starting in the tax year 2022. The Puerto Rico
Compliance · News · Taxes
September 16, 2023
New registration requirement for all existing and new entities
The Corporate Transparency Act (CTA) became federal law in the United States on January 1, 2024. This legislation requires certain companies to provide detailed information to the United States Department of the Treasury about individuals who hold ultimate control over the entity, whether directly or indirectly. The CT
Compliance · Doing Business · News · Taxes
September 13, 2023
Tax-Free Income – Law to Incentivize Property Acquisition
Puerto Rico Law 132 of 2010, also known as the “Law to Incentivize Property Acquisition and Promote the Construction Industry in Puerto Rico,” was enacted with the purpose of stimulating investment in property acquisition and promoting the development of the construction industry on the island. Here are its key points:
Doing Business · News · Tax Incentives · Taxes
August 17, 2023
Best practices to comply with the presence test
Here are some best practices to comply with the presence test: If you follow these best practices, you will be more likely to meet the presence test and be considered a resident of the state or territory where you want to live. Here are some additional tips: If you are considering relocating to Puerto Rico, Act 60 can
Compliance · Relocation · Tax Incentives · Taxes
August 17, 2023
Act 60 for Export Services & Commerce and for Individual Investors (formerly Acts 20/22)
We have a strong practice in Act 60 for Export Services & Commerce and for Individual Investors (formerly Acts 20/22). We counsel and advise clients who are seeking to relocate to Puerto Rico to benefit from these tax incentives. Act 60 is a law that provides tax benefits for businesses and individuals who relocate to
Compliance · Doing Business · News · Relocation · Tax Incentives · Taxes
August 17, 2023
What is the Tax Home Test
The tax home test is a rule used by the Internal Revenue Service (IRS) to determine an individual’s tax home for the purpose of determining their state of residency. The tax home test is based on the location of the individual’s principal place of employment. To meet the tax home test, the individual must have a princi
Compliance · Relocation · Tax Incentives · Taxes
August 17, 2023
What are the best practices to comply with the Tax Home Test
Here are some best practices to comply with the Tax Home Test: If you follow these best practices, you will be more likely to meet the Tax Home Test and be considered a resident of the state or territory where you work. Here are some additional tips: If you are considering relocating to Puerto Rico, Act 60 can be a gre
Compliance · Relocation · Tax Incentives · Taxes
August 17, 2023
What is the Closer Connection Test
The Closer Connection Test is a rule used by the Internal Revenue Service (IRS) to determine an individual’s state of residency for tax purposes. The Closer Connection Test is used when an individual does not meet the Tax Home Test, but they have a closer connection to one state than to any other state. To meet the Clo
Compliance · Relocation · Tax Incentives · Taxes
August 17, 2023
What are the best practices to comply with the Closer Connection Test
Here are some best practices to comply with the Closer Connection Test: If you follow these best practices, you will be more likely to meet the Closer Connection Test and be considered a resident of the state with which you have a closer connection. Here are some additional tips: If you are considering relocating to Pu
Compliance · Relocation · Tax Incentives · Taxes
August 17, 2023
As per the IRS, what do I need to do to becoming a Bona Fide Resident of Puerto Rico
According to the IRS, to be considered a bona fide resident of Puerto Rico, you must meet the following criteria: If you meet all of these criteria, you will be considered a bona fide resident of Puerto Rico for tax purposes. This means that you will be subject to Puerto Rican income tax on your worldwide income, but y
FAQ · Relocation · Tax Incentives · Taxes
August 17, 2023
Act 60 – Resident Individual Investor
Act 60, Chapter 2, is a tax incentive program for individual investors who relocate to Puerto Rico. The program offers a 100% exemption from Puerto Rico income taxes on interest, dividends, and certain capital gains. To qualify for the program, investors must become bona fide residents of Puerto Rico. This means that t
FAQ · Relocation · Tax Incentives · Taxes
August 17, 2023
Navigating Tax Strategies for Puerto Rico Residents
As residents of Puerto Rico, managing your taxes effectively can greatly impact your financial well-being. While the government doesn’t directly pay for your taxes, there are strategies and programs in place that can help you optimize your tax situation. Here, we’ll explore some key tactics to consider for making the m
Taxes
Bring the facts. We will tell you if Act 60 fits.
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