Single member LLC taxation

[DKM]

I own a single-member LLC in Wyoming since July 2019 and I renewed it this year just to keep the name. Lol. But there's certainly no business activities/sales for the past year and this year, so far.

I am a non-US citizen, non-resident, 100% foreign national living in another country.

Do I still need to file a federal tax return to the IRS?

I read from here that single-member LLCs are automatically disregarded for federal income tax purposes. The tax instead is reported to the member's personal tax return.

I am confused though since I am a non-US citizen/resident, should I still need to file taxes with IRS? Or instead, file it in my country of citizenship?

Anyone who has the same experience with these matters, I hope you can share some insights.

Thank you!!!

 

[bodyanyash]

I own a single-member LLC in Wyoming since July 2019 and I renewed it this year just to keep the name. Lol. But there's certainly no business activities/sales for the past year and this year, so far.

I am a non-US citizen, non-resident, 100% foreign national living in another country.

Do I still need to file a federal tax return to the IRS?

I read from here that single-member LLCs are automatically disregarded for federal income tax purposes. The tax instead is reported to the member's personal tax return.

I am confused though since I am a non-US citizen/resident, should I still need to file taxes with IRS? Or instead, file it in my country of citizenship?

Anyone who has the same experience with these matters, I hope you can share some insights.

Thank you!!!

You don't file federal because single member LLC is treated as sole-proprietor, so you file it on 1040 schedule C. Only corporations are required to file return even if there is no taxable income.

 

[Monzani]

I own a single-member Delaware LLC.

According to what I checked with my accountant, in my case we must fill out Form 5472 and 1120. I'm also non-American and non-resident.

These forms are for information only, you will not pay anything.

Maybe in other states it's different...

 

[DKM]

I own a single-member Delaware LLC.

According to what I checked with my accountant, in my case we must fill out Form 5472 and 1120. I'm also non-American and non-resident.

These forms are for information only, you will not pay anything.

Maybe in other states it's different...

Thank you for this. After filling the form, can you file it online? If yes, may I know which app/website you use?

 

[Monzani]

Thank you for this. After filling the form, can you file it online? If yes, may I know which app/website you use?

As far as I know you should send it through the Post Office

Specific addresses are in the form instructions

 

[bodyanyash]

I own a single-member Delaware LLC.

According to what I checked with my accountant, in my case we must fill out Form 5472 and 1120. I'm also non-American and non-resident.

These forms are for information only, you will not pay anything.

Maybe in other states it's different...

Corporations and LLCs are excluded from filling 5472 if they had no reportable transactions, which applies to the OP. 1120 is a corporation return, then you must have filed to treat your LLC as Corporation, in which case also does not apply to OP.

 

[DKM]

Corporations and LLCs are excluded from filling 5472 if they had no reportable transactions, which applies to the OP. 1120 is a corporation return, then you must have filed to treat your LLC as Corporation, in which case also does not apply to OP.

Thanks!

I've been reading this: https://www.llcuniversity.com/irs/form-5472-foreign-owned-llc/

From it, it looks like "reportable transactions" also include transactions related to forming the LLC. Therefore the state fees, registered agent fees, etc, right?

Also, it says "A Foreign-owned Single Member Disregarded Entity LLC is considered a Reportable Corporation under Section 1.6038A-1 of the IRS code" so regardless we received income, sales, profit, etc, we still need to file and report.

Also from here https://www.irs.gov/pub/irs-pdf/i5472.pdf, it says "While a foreign-owned U.S. DE has no income tax return filing requirement, as a result of final regulations under section 6038A, it will now be required to file a pro forma Form 1120 with Form 5472 attached by the due date (including extensions) of the return. "

 

[bodyanyash]

Thanks!

I've been reading this: https://www.llcuniversity.com/irs/form-5472-foreign-owned-llc/

From it, it looks like "reportable transactions" also include transactions related to forming the LLC. Therefore the state fees, registered agent fees, etc, right?

Also, it says "A Foreign-owned Single Member Disregarded Entity LLC is considered a Reportable Corporation under Section 1.6038A-1 of the IRS code" so regardless we received income, sales, profit, etc, we still need to file and report.

Also from here https://www.irs.gov/pub/irs-pdf/i5472.pdf, it says "While a foreign-owned U.S. DE has no income tax return filing requirement, as a result of final regulations under section 6038A, it will now be required to file a pro forma Form 1120 with Form 5472 attached by the due date (including extensions) of the return. "

You file unless you are exempt. It says you are also exempt if, "It is a foreign corporation that does not have a permanent establishment in the United States under an applicable income tax treaty", which applies to you.
It would be best to consult a CPA who specializes in that.

 

[muscleteen]

I own a single-member LLC in Wyoming since July 2019 and I renewed it this year just to keep the name. Lol. But there's certainly no business activities/sales for the past year and this year, so far.

I am a non-US citizen, non-resident, 100% foreign national living in another country.

Do I still need to file a federal tax return to the IRS?

I read from here that single-member LLCs are automatically disregarded for federal income tax purposes. The tax instead is reported to the member's personal tax return.

I am confused though since I am a non-US citizen/resident, should I still need to file taxes with IRS? Or instead, file it in my country of citizenship?

Anyone who has the same experience with these matters, I hope you can share some insights.

Thank you!!!

I own a single-member Delaware LLC.

According to what I checked with my accountant, in my case we must fill out Form 5472 and 1120. I'm also non-American and non-resident.

These forms are for information only, you will not pay anything.

Maybe in other states it's different...

Also non-US, non-resident here. How much did you guys pay for the LLC formation? And did you manage to get a US bank account as well? (That's what seems to be the hardest part)

 

[Monzani]

You file unless you are exempt. It says you are also exempt if, "It is a foreign corporation that does not have a permanent establishment in the United States under an applicable income tax treaty", which applies to you.
It would be best to consult a CPA who specializes in that.

You're right, mate.
In the case of the thread's author it is not necessary because there are no reportable transactions, thanks for correcting.

Also non-US, non-resident here. How much did you guys pay for the LLC formation? And did you manage to get a US bank account as well? (That's what seems to be the hardest part)

I paid $295 for the formation of the company + EIN, I already have 3 companies in Delaware, I always bought through delawareinc (harvard business), I do not know cheaper and more efficient options...

I don't have an American bank account, this is really difficult, you need to travel to the United States to have one, maybe a digital/remote solution like Payoneer or Mercury can help you

I have a bank account in other countries, in the United States, a real bank account can only be made by traveling there or through the Stripe Atlas, but I do not find it advantageous from a tax perspective.

 

[DKM]

You file unless you are exempt. It says you are also exempt if, "It is a foreign corporation that does not have a permanent establishment in the United States under an applicable income tax treaty", which applies to you.
It would be best to consult a CPA who specializes in that.

Thanks so much! I am really confused. I tried to get a quote from an accountant, but I have trust issues that they would still say I need to file because they will get paid for helping to do filing.

Excuse me for asking, do you also own an LLC categorized as foreign-owned U.S. DE?

 

[DKM]

You're right, mate.
In the case of the thread's author it is not necessary because there are no reportable transactions, thanks for correcting.

@Monzani reportable transactions include the fees you paid to the register agent (eg: delawareinc) or not? Because technically, that is the only flow of money for my LLC. I haven't started anything at all.

 

[Monzani]

Thanks so much! I am really confused. I tried to get a quote from an accountant, but I have trust issues that they would still say I need to file because they will get paid for helping to do filing.

Excuse me for asking, do you also own an LLC categorized as foreign-owned U.S. DE?

If you need help with accountants, maybe this site can help you: https://www.justanswer.com/

You can ask for a trial version for a week to clear up as many doubts as you want with professional accountants.

 

[Monzani]

@Monzani reportable transactions include the fees you paid to the register agent (eg: delawareinc) or not? Because technically, that is the only flow of money for my LLC. I haven't started anything at all.

No, that would not be considered a reportable transaction.

 

[DKM]

Also non-US, non-resident here. How much did you guys pay for the LLC formation? And did you manage to get a US bank account as well? (That's what seems to be the hardest part)

I had mine formed in Wyoming. I paid $150 in total to form an LLC through wyomingagents.

Like @Monzani said, it is hard to get a bank account without visiting the US. Payoneer and TransferWise will work as an alternative if you only need to receive/send wire, etc.

I was even denied approval from Stripe because according to them, I should have a physical office in the US and at least one employee.

 

[DKM]

If you need help with accountants, maybe this site can help you: https://www.justanswer.com/

You can ask for a trial version for a week to clear up as many doubts as you want with professional accountants.

thanks a bunch, guys!

 

[Impressor]

Also non-US, non-resident here. How much did you guys pay for the LLC formation? And did you manage to get a US bank account as well? (That's what seems to be the hardest part)

I finally decided on a service that would set up an LLC right up to where I get my bank account opened without having to visit the US (I'm a non-US resident and citizen). And I found firstbase.io to be pretty decent and legit. They're not the cheapest at $399 (I found some for around $300-350), but their bundled offer made the most sense for me. And they have some perks too.
Although my application is still under process, I think they're one of the best value for money services.

Note: They've collaborated with the likes of Mercury Bank. Firstbase (like all others) doesn't guarantee opening an account, and leave it to the bank's discretion.

 

[Impressor]

Like @Monzani said, it is hard to get a bank account without visiting the US. Payoneer and TransferWise will work as an alternative if you only need to receive/send wire, etc.

You should personally check-up with Mercury Bank. I've had a few emails exchanged with them and their prerequisites for a non-resident alien to open a bank are pretty simple and straightforward. That is, without having to visit the US or a physical office (with an employee) to open a bank account.

 

[DKM]

You should personally check-up with Mercury Bank. I've had a few emails exchanged with them and their prerequisites for a non-resident alien to open a bank are pretty simple and straightforward. That is, without having to visit the US or a physical office (with an employee) to open a bank account.

Wow, great insights. Thanks for this!

 

[Impressor]

Wow, great insights. Thanks for this!

My pleasure. If there's anything more you need to know related to the subject, just ask. I should have all the formalities done within a week or two.

For any tax-related queries, I'd recommend you seek help from an experienced CPA. Tax planning should never be considered a waste of money, believe me.