Green card holders: tax obligations for LLC owners

As a green card holder (lawful permanent resident), you are a U.S. tax resident from the date you receive your green card. This means you must report and pay tax on your worldwide income from all sources, both U.S. and foreign, on Form 1040. This applies regardless of where you live or where the income is earned. Your LLC income, employment income, investment income, and any foreign income must all be reported.

If your LLC is a single-member disregarded entity, all income and expenses are reported on Schedule C of your Form 1040. You will pay self-employment tax (15.3%) on net business earnings through Schedule SE. If the LLC has elected S-corp or partnership treatment, you will receive a Schedule K-1 and report the income accordingly. As a permanent resident, you have the same tax filing obligations as a U.S. citizen.

If you have a financial interest in or signature authority over foreign financial accounts with an aggregate value exceeding $10,000 at any time during the calendar year, you must file FinCEN Form 114 (FBAR). This includes bank accounts, brokerage accounts, mutual funds, and other financial accounts held outside the U.S. The FBAR is filed separately from your tax return, with a deadline of April 15 (with an automatic extension to October 15).

In addition to FBAR, you may need to file Form 8938 (Statement of Specified Foreign Financial Assets) if your foreign financial assets exceed certain thresholds. For single filers living in the U.S., the threshold is $50,000 at the end of the year or $75,000 at any time during the year. This form is filed with your tax return and covers a broader range of assets than FBAR, including foreign stock, securities, financial instruments, and interests in foreign entities.

To avoid double taxation on income earned abroad, you can claim the foreign tax credit (Form 1116) for taxes paid to foreign governments. If your home country has a tax treaty with the U.S., certain income types may qualify for reduced tax rates or exemptions. However, as a green card holder, your ability to claim certain treaty benefits may be limited compared to nonresident aliens. Review the specific treaty provisions with a tax professional.

In your first year as a green card holder, gather information on all foreign financial accounts and assets, determine your worldwide income from the date you received your green card, file Form 1040 with Schedule C for your LLC income, file FBAR if applicable, file Form 8938 if your foreign assets exceed the thresholds, and make estimated quarterly tax payments if you expect to owe more than $1,000 in taxes. Consider engaging a tax professional experienced in international tax for your first filing.