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.
If wages are treaty-exempt for income tax, can payroll still have to withhold FICA?
One of our advisers says a treaty may reduce or eliminate income-tax withholding on a founder's compensation, but our payroll provider is still talking about Social Security and Medicare taxes as thou...
I flew to the U.S. for a client summit and ended up delivering paid workshop days. Should I isolate those days as U.S. service income?
I am a freelance strategist from Romania and most of my work is remote. During a client summit in the U.S., I ended up adding two paid workshop days that were separately billed. The rest of the trip w...
Our first U.S. hire sends invoices, but she works only for us and follows our schedule. Should we be more worried about payroll classification?
We called the relationship 'contractor' because it felt operationally simpler, but the facts are starting to look more like a normal employment arrangement. She works on our schedule, uses our systems...
If a founder ends up working in the U.S. on H-1B status, does FICA usually apply from day one?
I know the company will need immigration counsel separately, but on the tax side I am trying to understand the payroll basics before compensation starts. I have read that some categories of foreign pr...
Everyone keeps mentioning totalization agreements when payroll crosses borders. What file should we actually maintain if we think one applies?
Our founder is from Germany and now works partly in the United States for the company. Several advisers have mentioned a possible totalization agreement angle for Social Security coverage, but so far ...
Can a foreign employer really owe U.S. Social Security and Medicare withholding for work performed in the States?
I always thought Social Security and Medicare withholding was mostly a domestic-employer issue, so I was surprised to read that a foreign employer can still have U.S. payroll obligations when services...
My nonresident employee says a treaty exempts some wages and wants to give us Form 8233. How should we think about that file?
We are a small foreign-owned LLC and one new U.S.-based hire says she is a nonresident alien and may be treaty-exempt on part of her compensation. She mentioned Form 8233, which I had never dealt with...
My payroll provider says nonresident alien employees have special W-4 and withholding treatment. What should I verify before first payroll?
We are hiring our first employee in the United States and she will be a nonresident alien for tax purposes. My payroll provider says the setup is not identical to a normal domestic payroll profile and...
If I put myself on U.S. payroll while living part of the year in the States, does FICA usually apply?
I am a founder from South Africa and my LLC is considering putting me on payroll because I now spend meaningful time working from the United States. My instinct was that being foreign might keep payro...
Green card abandonment and continuing LLC ownership
I am considering abandoning my U.S. green card and moving back to my home country. I own a U.S. LLC that generates significant income. Can I continue to own my LLC after giving up my green card? What ...
My Form 5472 penalty notice went to an old registered-agent address. How should I frame the response?
I only learned about the penalty because my former registered agent finally forwarded a notice packet months after the IRS had mailed it. The LLC had already changed mailing arrangements, but the old ...
If I am asking for reasonable cause on a late Form 5472, what documents actually make the file stronger?
I missed the Form 5472 deadline for my foreign-owned LLC because I incorrectly thought no revenue meant no filing. Once I learned the rule, I prepared the filing right away, but now I am trying to bui...
On Form SS-4, should the mailing address and physical address be the same for a foreign-owned LLC?
My U.S. LLC uses a registered agent in Wyoming, but I actually manage the business from Seoul. When I reviewed the SS-4 instructions, I realized the mailing address and physical address lines are aski...
My foreign owner has no ITIN yet. What exactly goes on line 7b of Form SS-4?
I am helping my brother set up a U.S. LLC from Malaysia, and we got stuck on the responsible party section of Form SS-4. He is the real owner and should clearly be the responsible party, but he has no...
If I am claiming treaty residency in Canada, does Form 8833 have to go in with a timely 1040-NR?
I spent enough time in the U.S. to create a real residency question, but my position is that the Canada treaty tie-breaker keeps me resident in Canada for treaty purposes. I know Form 8833 is part of ...
My U.S. travel was split across conferences, transit days, and a client workshop. How careful do I need to be on Schedule OI?
I am a founder from Singapore and had three very different U.S. trips during the year: one conference trip, one short customer workshop in Austin, and one transit-heavy trip that involved an overnight...
Can I sign the pro forma 1120 abroad and fax the Form 5472 package from outside the U.S.?
I live in Dubai and will not be in the United States before the filing deadline. My preparer says the foreign-owned LLC filing package may need to be faxed to the IRS under the special Form 5472 rules...
My foreign-owned LLC had no sales yet. What business activity code goes on the pro forma 1120?
This was a pre-launch year for my SaaS LLC, so the company had expenses, bank movement, and owner funding, but zero customer revenue. When I looked at the Form 1120 instructions, the principal busines...
Single vs MFJ vs MFS Comparison (Ep. 55)
I need help with my filing status: Single vs MFJ vs MFS Comparison. What are the rules and how do I determine what applies to my situation?
My accountant filed Form 7004 for the LLC. Does that also extend my own 1040-NR deadline?
I am a Spanish founder with a foreign-owned U.S. LLC, and my accountant filed Form 7004 because the Form 5472 package was not ready by the spring deadline. At first I felt relieved, but then I realize...
There was no bank transfer, just an owner ledger offset. Can that still matter on Form 5472?
My Netherlands LLC owner account moves all year because sometimes I leave money in the company and sometimes I let the company cover costs that I would otherwise reimburse later. At year-end the accou...
We already filed Form 5472, but I just found a missed owner reimbursement. Do we amend immediately?
My accountant filed the pro forma 1120 and Form 5472 for my single-member LLC, and a month later I realized one owner reimbursement never made it into the books before the return went out. It is not a...
My LLC had no sales, only bank fees and owner funding. Do I still have a Form 5472 issue?
This was basically a setup year for my U.S. LLC. I am in Pakistan, opened the company, got the EIN, paid formation and banking costs, and moved about $6,500 from myself into the LLC so it could surviv...
I wired money into the LLC and later took some back out. How do I know if that was a loan or capital for Form 5472?
I am based in Brazil and funded my Wyoming LLC several times during the year because Stripe payouts were delayed. In total I put in about $32,000 and then took back roughly $11,000 over a few months o...
My LLC had transactions with me personally and with my Hong Kong company. Is one Form 5472 enough?
I own a Delaware LLC personally from the UAE, but I also have a Hong Kong company that provided development and admin support to the LLC during the year. The LLC received funding from me as the owner ...
My foreign owner paid the LLC's software stack on a personal card. Does that belong on Form 5472?
I run a New Mexico single-member LLC from India and most of the year was very lean, around $48,000 of revenue. To keep things moving, I paid several business bills personally, including AWS, Figma, Go...
I had a dual-status year, but my spouse is a U.S. citizen. Are we really blocked from filing jointly?
I moved into the United States during the year and would otherwise be dual-status, but my wife is a U.S. citizen and we normally think in terms of one household return. Then I read the dual-status rul...
I qualified for the closer connection exception, but I missed the Form 8840 deadline. Did I just lose it?
I am a UK founder with a Wyoming LLC and I spent 146 days in the United States during the year, so I was careful about staying under the 183-day actual-presence limit for the closer connection excepti...
Publication 519 says I need a statement to establish my residency termination date. What kind of details belong in that file?
I understand the broad concept that an earlier residency termination date needs more than just my own conclusion, but I have not yet seen a practical checklist for the statement the IRS wants. Publica...
I thought my dual-status year would still get the standard deduction. Why does Publication 519 say no?
I had assumed the hardest part of a dual-status year would be splitting the income. After reading Publication 519 more carefully, I realized the restrictions may be the bigger surprise, especially the...
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