Taxation Compliances for Non-US Citizens/Non-US Residents
Single Member LLC/ Multi-Member LLC – Online business in the US (Not having any physical presence/physical office/employees/dependent agents in the US)
- Your LLC’s income and expenses are reported on your personal income tax return in your home country.
- Besure to file Form 5472 with the US IRS; failure to do so or filing incorrectly may result in a $25,000 fine.
- You might also need to file Form FBAR (Report of Foreign Bank and Financial Accounts) if your foreign financial accounts exceed $10,000 at any time during the year. Failure to file may incur a penalty of $100,000 or 50% of the account balance at the time of the violation, whichever is higher.
Single Member LLC/ Multi-Member LLC having any physical presence/physical office/employees/dependent agents in the US
- You must file a federal income tax return in the US, with your LLC’s income and expenses reported on Form 1040NR.
- Additionally, Form 5472 must be filed with the US IRS; failure to do so or filing incorrectly may result in a $25,000 fine.
- If the aggregate value of your foreign financial accounts exceeds $10,000 during the year, you may also need to file Form FBAR (Report of Foreign Bank and Financial Accounts). Failure to file could lead to a penalty of $100,000 or 50% of the account balance at the time of the violation, whichever is higher.
C-Corporation – Online Business in the US (Not having any physical presence/physical office/employees/dependent agents in the US)
- Form 1120 must be filed with the IRS for your C-Corporation, regardless of whether your taxable income in the US is zero or if there has been no activity throughout the year.
- Additionally, Form 5472 needs to be filed with the US IRS. Failure to file or filing incorrectly can result in a $25,000 fine.
- You may also need to file Form FBAR (Report of Foreign Bank and Financial Accounts) if the aggregate value of your foreign financial accounts exceeds $10,000 during the calendar year. The penalty for failing to file is $100,000 or 50% of the account balance at the time of the violation, whichever is higher.
C-Corporation – having any physical presence/physical office/employees/dependent agents in the US
- Form 1120 must be filed with the IRS for your C-Corporation, even if your taxable income in the US is zero or if there has been no activity throughout the year.
- The income from your C-Corporation will be reported on your US federal income tax return using Form 1040NR.
- Additionally, Form 5472 must be filed with the US IRS. Failure to file or filing it incorrectly can result in a $25,000 fine.
- You may also need to file Form FBAR (Report of Foreign Bank and Financial Accounts) if the aggregate value of your foreign financial accounts exceeds $10,000 at any time during the calendar year. The penalty for failure to file is $100,000 or 50% of the account balance at the time of the violation, whichever is higher.
Depending on your business activity and volume throughout the year, there may be additional compliance requirements beyond those mentioned above.
For further insights, explore the Startxpress Help Center and Blog. If you have questions or need support, reach out anytime at support@startxpress.io!
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