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.
I chose New Mexico for low maintenance, but my clients are in California. Did I solve the wrong problem?
I am in Hong Kong and formed a New Mexico LLC because I kept hearing it was easier to maintain than Delaware or California. So far that part seems true. The issue is that my freelance design clients a...
My Delaware LLC had almost no activity. Do I still owe the Delaware annual tax?
I am based in Spain and formed a Delaware single-member LLC last year for a software product that has barely launched. There was maybe $3,000 of test revenue and a few owner-funded expenses, but no pa...
My German SaaS LLC has U.S. customers and a U.S. freelance closer. Did I create ECI?
I live in Berlin and own a Wyoming single-member LLC that sells workflow software to U.S. companies. Revenue is now about $240,000 per year. I write the code and manage the company from Germany, but I...
I formed a Delaware SaaS LLC with Stripe Atlas from India. If I have no U.S. office, is Form 5472 my only filing?
I am based in Bangalore and formed a Delaware single-member LLC through Stripe Atlas in early 2024 for a B2B SaaS product. We are around $90,000 ARR, with about 70% of customers in the U.S. and the re...
I spent 150 days in the U.S. this year. Can Form 8840 save me from being taxed as a resident?
I'm a Canadian who spends winters in Florida and summers in Canada. This year I was in the U.S. for about 150 days. I understand there's a substantial presence test that could make me a U.S. tax resid...
What is the FDII deduction and can my U.S. corporation benefit from it?
I own a U.S. C-corporation that sells software licenses to customers all over the world. About 60% of our revenue comes from foreign customers. Someone mentioned that there's a deduction called FDII t...
What is IRC 6038A and why does my single-member LLC have to file Form 5472 with a $25,000 penalty?
I'm an Indian citizen living in Mumbai. I formed a single-member LLC in Wyoming two years ago for an online consulting business. I just learned about IRC 6038A and Form 5472 from a tax forum. Apparent...
What are the key differences between Subpart F income and GILTI?
I'm trying to understand the difference between Subpart F and GILTI. They both seem to tax CFC income currently to U.S. shareholders. If GILTI was supposed to be a catch-all for everything not already...
What is a year-end tax planning checklist for foreign LLC owners?
The end of the tax year is approaching and I want to make sure I have covered all important tax planning items for my US LLC. As a foreign owner, I know there are unique considerations beyond what dom...
How does my foreign-owned LLC decide if a worker is an employee or independent contractor?
I have a foreign-owned LLC and I'm working with several people in the U.S. — a web developer who works from home on their own schedule, a virtual assistant who works set hours, and a marketing consult...
We discovered our filed Schedule K-2 was incomplete. Do we correct just the schedule, or does the amended-return package have to carry the whole explanation too?
I am part of the tax team for a U.S. person that files Form 8865. After filing, we realized one international item relevant to Schedule K-2 and K-3 was omitted. The partnership facts themselves did no...
I deducted foreign income taxes years ago instead of claiming the credit. Is it really still possible to amend after more than three years?
I am a U.S. person based in the UAE and found out that in an older year my adviser treated foreign taxes as an itemized deduction rather than using the foreign tax credit. The original return is well ...
I contributed appreciated software IP to a foreign partnership. Is Schedule O the main Form 8865 schedule I should expect?
I am a U.S. founder who transferred software-related intangible property into a foreign partnership in exchange for a partnership interest. The transfer was made as part of a restructuring and the ini...
My foreign tax was refunded after I already claimed the credit. Do I just adjust this year's Form 1116, or do I need to amend prior years too?
I live in Canada and in 2026 I received a partial refund of Canadian tax that I had previously claimed as a foreign tax credit on my U.S. return. The refund relates mostly to my 2024 U.S. tax year. I ...
If I elect resident treatment with my U.S. spouse, do I stop filing Form 1040-NR completely for that year?
I am a nonresident from Spain married to a U.S. resident. During 2025 I had about $36,000 of foreign freelance income and a small amount of U.S.-source consulting income. My spouse had around $112,000...
We badly overpaid corporate estimates. Can Form 4466 still get a quick refund if the return is almost ready?
Our U.S. corporation had a much lower fourth quarter than expected, and now it looks like we overpaid federal estimated tax by roughly $28,000. The final return is nearly done, but our CFO mentioned a...
Several U.S. owners are Category 1 filers. Can only one of us file the actual Form 8865?
I am one of three U.S. persons who together control a foreign partnership in the UAE. Each of us appears to fit the Category 1 rules, and no one wants to file three full copies of the same Form 8865 p...
My Schedule K-3 shows several foreign tax categories. Can I still combine everything onto one Form 1116 to keep the return manageable?
I am a U.S. individual investor in a foreign-focused partnership, and my Schedule K-3 includes passive category items, general category items, and a small amount that looks treaty re-sourced. I also h...
Our corporation still has not received its EIN. Can we e-file Form 1120 with 'Applied For' or do we have to change filing strategy?
I formed a U.S. C corporation from Singapore near year-end and the company is now ready to file its first return. Gross receipts were only about $118,000, but our tax software keeps rejecting the file...
I claimed foreign tax credits on an accrued basis in my workpapers but forgot the election statement. Did I actually make the election?
I am a U.S. resident founder living in France, and in our 2025 workpapers we computed the foreign tax credit using accrued taxes because the French assessment cycle lags behind payment timing. My retu...
My U.S.-business income is fully treaty-exempt. Do I still have to file Form 1040-NR?
I am a resident of the Netherlands and earned about $54,000 through work that my adviser says falls under treaty protection, so the expected U.S. tax is zero. I was still engaged in activity that coul...
We joined a consolidated group midyear. Does our short-period Form 1120 count as a final return even though the corporation still exists?
I run a U.S. software company owned by a foreign parent, and during 2025 we were acquired into a larger consolidated tax group. We still legally exist, but our stand-alone return only covers the month...
Disregarded entity vs C-Corp election: pros and cons?
I own a single-member LLC as a foreign person and it is currently treated as a disregarded entity. I have been hearing that electing C-Corp status might be better for my situation. What are the advant...
What are the Form 5471 filing requirements for CFC owners?
I just learned I need to file Form 5471 for a foreign corporation I have an interest in. This form looks incredibly complex — it has multiple schedules and categories of filers. Can someone explain wh...
What is Subpart F income and how does it apply to foreign-owned business structures?
I've been reading about Subpart F income in the context of CFC rules and I'm confused about how it fits in with GILTI. I'm a U.S. citizen running a business through a foreign corporation. Some of the ...
What are the FBAR penalties for non-willful vs. willful violations?
I have a foreign bank account that I use for my LLC business but I never filed an FBAR (FinCEN Form 114). What is the difference between non-willful and willful FBAR penalties? My account balance was ...
Starting my first online business — should I go with sole proprietorship or single-member LLC?
I'm a freelance web developer based in Germany and I want to start selling SaaS products to US customers. I'm trying to figure out the simplest business structure. A sole proprietorship seems easiest ...
How do I calculate the Substantial Presence Test to know if I'm a U.S. tax resident?
I'm a foreign national who owns a single-member LLC in the U.S. and I travel to the States frequently for business meetings. Last year I was in the U.S. for about 110 days, and the year before about 9...
I run a SaaS business through my foreign-owned LLC — are subscription revenues subject to U.S. tax?
I'm from Poland and I built a project management SaaS tool. I formed a Delaware LLC to accept payments from U.S. and international customers. Everything runs on AWS and I manage everything from Warsaw...
Does First Time Abatement apply to Form 5472 or other international penalties?
I heard the IRS has a First Time Abatement policy that removes penalties for first-time offenders. Does this apply to international information return penalties like Form 5472 or Form 5471? I have a c...
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