Taxation Compliances for Non-US Citizens/Non-US Residents
Single Member LLC/ Multi-Member LLC - Online business in the US (Not having any physical presence/physical office/employees/dependent agents 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. The 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.
Single Member LLC/ Multi-Member LLC having any physical presence/physical office/employees/dependent agents in the US
You have to file a federal income tax return 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 which 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. The 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.
C-Corporation – Online Business in the US (Not having any physical presence/physical office/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.
Next comes, Form 5472 which 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. The 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.
C-Corporation – having any physical presence/physical office/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 which 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. The 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.