US Taxes can be overwhelming and complex. We have simplified it for you below. We got your back. See which bucket is applicable to you & this will help you with all the relevant tax compliances you need to do.
Bucket 1 - US Resident - Single Member LLC/Multi-Member LLC -
By default, the income and expenses of your LLC will flow onto your personal income tax return (Form 1040, Schedule C).
If you choose your LLC to be taxed a C-Corporation you have to file Form 8832, Form 1120 and Form 1040.
If you choose your LLC to be taxed a S-Corporation you have to file Form 2553, Form 1120S and Form 1040.
You may also have to file Form FBAR (Report of Foreign Bank and Financial Accounts), if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. Penalty for failure to file is $100,000 or 50% of the balance of the account at the time of the violation, whichever is higher.
Bucket 2 - US Resident - C-Corporation -
Form 1120 needs to be filed with the IRS for your C-Corporation. This form must be filed even if your taxable income in the US is 0 or if there has been no activity throughout the year.
The income from your C-Corporation will be reported in your US federal income tax return on Form 1040.
You may also have to file Form FBAR (Report of Foreign Bank and Financial Accounts), if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. Penalty for failure to file is $100,000 or 50% of the balance of the account at the time of the violation, whichever is higher.
Bucket 3 - Non-US Resident - Single Member LLC/ Multi-Member LLC - Online business in the US
The income and expenses of your LLC will flow onto your personal income tax return in your home country.
You have to file Form 5472 with the US IRS. Not filing Form 5472 or even filing it incorrectly has huge negative consequences such as the IRS imposing a $25,000 fine.
You may also have to file Form FBAR (Report of Foreign Bank and Financial Accounts), if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. Penalty for failure to file is $100,000 or 50% of the balance of the account at the time of the violation, whichever is higher.
Bucket 4 - Non-US Resident - Single Member LLC/ Multi-Member LLC – Engaged in Trade or Business in the US (having employees/dependent agents in the US).
The income and expenses of your LLC will flow onto your US federal income tax return on Form 1040NR.
Next comes, Form 5472 that has to be filed with the US IRS. Not filing Form 5472 or even filing it incorrectly has huge negative consequences such as the IRS imposing a $25,000 fine.
You may also have to file Form FBAR (Report of Foreign Bank and Financial Accounts), if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. Penalty for failure to file is $100,000 or 50% of the balance of the account at the time of the violation, whichever is higher.
Bucket 5 - Non-US Resident – C-Corporation – Online Business
Form 1120 needs to be filed with the IRS for your C-Corporation. This form must be filed even if your taxable income in the US is 0 or if there has been no activity throughout the year.
Next comes, Form 5472 that has to be filed with the US IRS. Not filing Form 5472 or even filing it incorrectly has huge negative consequences such as the IRS imposing a $25,000 fine.
You may also have to file Form FBAR (Report of Foreign Bank and Financial Accounts), if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. Penalty for failure to file is $100,000 or 50% of the balance of the account at the time of the violation, whichever is higher.
Bucket 6 - Non-US Resident – C-Corporation – Engaged in Trade or Business in the US (having employees/dependent agents in the US).
Form 1120 needs to be filed with the IRS for your C-Corporation. This form must be filed even if your taxable income in the US is 0 or if there has been no activity throughout the year.
The income from your C-Corporation will flow onto your US federal income tax return on Form 1040NR.
Next comes, Form 5472 that has to be filed with the US IRS. Not filing Form 5472 or even filing it incorrectly has huge negative consequences such as the IRS imposing a $25,000 fine.
You may also have to file Form FBAR (Report of Foreign Bank and Financial Accounts), if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. Penalty for failure to file is $100,000 or 50% of the balance of the account at the time of the violation, whichever is higher.
There could be other additional compliances in addition to the above, depending on your business activity and volume throughout the year.
Our business plan also includes a free tax consultation with one of our partner’s CPA. This meeting will help you solve your all your tax-related and tax-structuring questions in detail.
All of these compliances and filings will be taken care of by our CPA for you. At the time of tax filings, our CPA will get in touch with you, prepare your filings, and file your returns accurately. You do not have to spend time finding a reliable CPA or pay for any extra consultation with a CPA at the last minute.
The more closer to the due date, you reach out to CPAs in the tax filing season, the higher the amount they will charge you. All of that is avoided using our subscription.
Being part of the doola ecosystem, you also have access to free CPA consultations throughout the year and legal help as and when required. We have vetted partners that can save you time and money, while giving you a quick resolution for your questions/transactions.
Subscribing to doola is like a load taken off your head along with added ease, accuracy and convenience.
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