Real Tax Questions, Expert Answers
Get answers to your foreign-owned LLC tax questions from ForeignLLCTax. Every answer includes IRS source citations and step-by-step guidance.
My LLC trades through a broker, but it also does a little consulting. Does that break the safe harbor?
I am in Australia and use one Wyoming LLC for two things: a personal trading account through a U.S. broker and a small consulting side business that earned only about $12,000 this year. The trading ca...
I flew to New York for demos and signed two SaaS deals there. Did I just create a much bigger U.S. tax problem?
I am based in the UK and run a small B2B SaaS company through a Wyoming LLC. Last month I spent six days in New York, met prospects in person, and signed two annual contracts worth about $48,000 total...
If my trading activity fits the broker safe harbor, why do people still mention Form 5472?
I am in India and use a single-member Delaware LLC for active day trading through a U.S. broker. There is no other business activity. I understand the IRS says broker-only trading can avoid U.S. trade...
My LLC only holds U.S. dividend stocks. Why am I seeing withholding if I am not running a U.S. business?
I am in the UK and use a Delaware LLC as a holding vehicle for a U.S. equity portfolio. The account mostly holds dividend-paying stocks. There are no employees or active business operations. I expecte...
My SaaS contract has a $12,000 setup fee and $1,200 monthly subscription. Do I analyze the tax the same way?
I live in India and own a Delaware LLC that sells workflow software to U.S. companies. One new client agreed to pay a one-time $12,000 implementation fee plus $1,200 per month after launch. I do all o...
If my LLC only trades through Interactive Brokers, does that mean I am not in a U.S. trade or business?
I am in Singapore and use a Wyoming LLC mainly for trading U.S. stocks and ETFs through a U.S. broker. There are no employees, no office, and no other business activity. Annual gains vary a lot, but c...
I only use a U.S. warehouse for distribution, not retail. Does that still create a major U.S. tax issue?
I live in the UAE and use a New Mexico LLC to sell branded products online. We do not have a store or office in the U.S., but a New Jersey warehouse stores inventory and ships all U.S. orders. Revenue...
My clients are abroad but my LLC is in the U.S. Does that automatically make the income foreign-source?
I use a U.S. LLC from Thailand for design retainers and online workshops. Most of my clients are outside the U.S., so I assumed the income must be foreign-source. Then I learned that service income ma...
I hired my first U.S. employee for my foreign-owned LLC. Did I just change my whole tax profile?
I am in India and run an ecommerce operations company through a Delaware LLC. Until now everyone worked overseas, but I just hired a full-time U.S. employee in Texas to handle customer operations and ...
I am a non-U.S. founder with a brand-new Delaware LLC. Which bank setup is the least painful first move?
I live in Japan and just formed a Delaware LLC for a SaaS startup. I have been comparing Mercury, Relay, Novo, and Wise, and now I feel less certain than when I started. Mercury seems best for interna...
I discovered the missed filing myself before the IRS contacted me. Should I file the delinquent return now or wait for advice?
I am in Hong Kong and realized my foreign-owned LLC missed an international information filing. The IRS has not contacted me yet. I found the delinquent international information return procedures onl...
I got an IRS exam letter asking for records tied to Form 5472. What is the first smart step?
I live in France and own a Delaware LLC. The IRS sent a letter asking for supporting records tied to our Form 5472 filing, including related-party transactions and ownership details. I have the record...
If I missed Form 5472 two years ago, is the problem only the penalty or is the year still open too?
I am in Australia and my Delaware LLC missed a Form 5472 filing for an earlier year because I did not understand owner-paid expenses counted as reportable transactions. I was mentally treating the iss...
My preparer missed the filing. Can actions of an agent help with reasonable cause?
I am in the UAE and my accountant missed the Form 5472 filing even though I had sent the records on time. We now have a penalty notice. I know the IRS often says taxpayers are still responsible even i...
I keep hearing about Schedule C, but my foreign-owned LLC adviser says it may not apply to me at all
I am in Brazil and own a single-member U.S. LLC. Generic LLC content online keeps telling me Schedule C is the standard return for a one-owner business. My U.S. adviser says that is domestic content a...
I just got a $25,000 Form 5472 penalty notice. What should I do first?
I am in India and own a Delaware single-member LLC. We filed late and now received an IRS notice assessing a $25,000 Form 5472 penalty. Revenue was only about $18,000, so the penalty is larger than th...
My LLC is filing Form 5472, but does that mean I personally also file Form 1040-NR?
I live in South Korea and own a Delaware single-member LLC. My preparer is getting ready to file Form 5472 with the pro forma Form 1120 because I had owner funding and reimbursements during the year. ...
I meant to elect corporate treatment when I formed the LLC but never filed Form 8832. Can I backdate it now?
I am in Japan and formed a U.S. LLC almost a year ago. From day one I intended to treat it like a corporation for tax planning reasons, but I later realized Form 8832 was never actually filed. We alre...
Can I split a $20,000 deposit into two $10,000 deposits to avoid the CTR paperwork?
I heard that banks file a report if you deposit more than $10,000 in cash. My foreign-owned LLC just received a $20,000 cash payment from a client. I was thinking of depositing $10,000 today and $10,0...
My advisor says the treaty protects me, but do I actually need Form 8833 if no U.S. tax ends up due?
I am in France and use a Delaware LLC for consulting. My advisor says the treaty should protect me because there is no permanent establishment in the U.S., and that my U.S. tax may be reduced to zero ...
A U.S. payer says I might need W-8ECI instead of W-8BEN-E. How do I know if they are right?
I live in Mexico and run a Delaware LLC for enterprise software implementation. One U.S. payer told me to ask my tax adviser whether the payments are effectively connected and whether I should give th...
My LLC only files Form 5472 with a pro forma 1120. On Form 7004 do I still use the 1120 code?
I am in Canada and my accountant is preparing an extension for my foreign-owned single-member LLC. Since the business is disregarded, I assumed there would be some special code for Form 5472 itself. B...
Marketplace wants a W-8BEN-E, but I am not even sure which entity should be signing it
I live in the UAE and use a Delaware LLC for marketplace sales and some direct consulting. The marketplace asked for Form W-8BEN-E, but I have a foreign parent company too, and I suddenly realized I a...
My principal place of business is in Singapore. Should I still try the IRS EIN online system first?
I am forming a Delaware LLC from Singapore and need an EIN. Some people say everyone should just use the IRS online EIN application, but others say international applicants have to use phone, fax, or ...
For my foreign-owned LLC, do I really leave almost all of Form 1120 blank?
I am in Brazil and my accountant told me the Form 1120 for my foreign-owned single-member LLC is basically just a pro forma cover form with Form 5472 attached. That sounds strange because when I look ...
I paid LLC costs personally from India. Which Form 5472 section do those usually affect?
I own a Delaware single-member LLC from India and I am trying to prepare records for Form 5472. During the year I paid AWS, legal fees, and some contractor invoices personally before reimbursing mysel...
Do I owe California's $800 franchise tax if my foreign-owned LLC is registered in CA but earns no CA income?
I registered my single-member LLC in California because my registered agent is there. I'm a non-resident alien living in Germany and all my clients are outside the U.S. I just got a notice from the Ca...
My affiliate programs handle payouts, but I pay a lot of tools and content costs personally. Does that still matter for Form 5472?
I am in the Philippines and use a Delaware LLC for affiliate sites. Revenue is around $68,000 from Amazon Associates and a few other programs. The programs handle the payout side, but I still personal...
I am in Russia and the payer says treaty rates are off the table now. Is that because of the suspension?
I use a U.S. LLC for online licensing income and one U.S. payer recently said they have to withhold at the statutory 30% rate on new payments because they cannot accept treaty claims anymore. I know t...
I live in Turkey and do consulting. Should I actually care about U.S. day counts under the treaty tables?
I am a Turkish consultant using a U.S. LLC for software and analytics projects. Most work is done from Istanbul, but I may spend a few weeks in the U.S. this year with one client. I found the IRS trea...
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