Delaware 1 person LLC taxes

[Elgringoblanco]

Hello , I have a few question about Delaware 1 person LLC taxes.

I've heard and read everywhere that non resident who dont own anything neither as make money in the us shouldn't pay any American taxe , is it true ?

I'll be mostly based in Spain, but barelly never in the same country for more than a couple month , my customer will be European and my provider too.

Thanks for your time and help

 

[Elgringoblanco]

Also , do I have to fill the IRS paper even if I dont make any money in the US ? Thanks

 

[Natasja]

Correct. A single-member LLC is a disregarded entity, meaning that it isn't treated distinct from it's owner in terms of tax purposes. The IRS will allow the owner to report the business income on their personal tax return.
Since you're non-US resident and don't do business within the US, you don't have any tax liability in the US. Nonetheless the IRS still requires you to file a tax return. Failing to do so will result in the company getting dissolved.

 

[fshore]

Correct. A single-member LLC is a disregarded entity, meaning that it isn't treated distinct from it's owner in terms of tax purposes. The IRS will allow the owner to report the business income on their personal tax return.
Since you're non-US resident and don't do business within the US, you don't have any tax liability in the US. Nonetheless the IRS still requires you to file a tax return. Failing to do so will result in the company getting dissolved.

You don't have file a regular tax return. Just a pro forma 1120 and the 5471 reporting form.

 

[Elgringoblanco]

Thanks fshore , any chance you know a good accountant who ain't asking 2k for 1 paper ? Thanks again for your help and time

 

[WoWNull]

You don't have file a regular tax return. Just a pro forma 1120 and the 5471 reporting form.

are you sure that the reporting is required?
as i know when i ask tax expert he said i am not required to pay anything nor report anything
i just need to pay the Franchise Taxes which is around 250~300$

 

[fshore]

are you sure that the reporting is required?
as i know when i ask tax expert he said i am not required to pay anything nor report anything
i just need to pay the Franchise Taxes which is around 250~300$

Yes, since 2017 you need to file.

You can do it yourself, not too complicated.

 

[Elgringoblanco]

Wownull , did you already had to pay the franchise tax ? They didn't asked anything else ?

 

[Artemis Eleutheria]

Reporting requirement is recent maybe 6-18mo old by now

 

[Elgringoblanco]

Reporting requirement is recent maybe 6-18mo old by now

And it didn't change nothing for European who own an LLC ? Thanks

 

[WoWNull]

Yes, since 2017 you need to file.

You can do it yourself, not too complicated.

I need to check it

Wownull , did you already had to pay the franchise tax ? They didn't asked anything else ?

My LLC. Still new less than a year

 

[Artemis Eleutheria]

And it didn't change nothing for European who own an LLC ? Thanks

Yes it did change. Before you did not have to do any paperwork for the IRS, now you have to do paperwork for the IRS.

Taxwise nothing changed ... yet.

 

[Elgringoblanco]

Yes it did change. Before you did not have to do any paperwork for the IRS, now you have to do paperwork for the IRS.

Taxwise nothing changed ... yet.

Perfect , I'll do it fast and use it as long as it's interesting, thanks Artemis

 

[Natasja]

You don't have file a regular tax return. Just a pro forma 1120 and the 5471 reporting form.

Not sure what the difference is but I got this with a quick Google search:

Previously single member LLCs with foreign owners were not required to file. However, starting 2017, all foreigners who own a US LLC must file a 5472 US tax return with the IRS for disclosure purposes even if they do not owe tax in the US. ... The income from the US LLC may still be taxed in the country of residency.

 

[Marzio]

You can do it yourself, not too complicated.

An accountant asked $500 to file those 2 forms which seems a lot since i'm not US citizen, not US resident, not selling in US. Is there any tutorial on how to correctly file those forms?

 

[Sols]

An accountant asked $500 to file those 2 forms which seems a lot since i'm not US citizen, not US resident, not selling in US. Is there any tutorial on how to correctly file those forms?

Check the IRS website. The IRS does a very good job at explaining forms.

https://www.irs.gov/forms-pubs/about-form-1120
https://www.irs.gov/forms-pubs/about-form-5472
There you can find the forms and instructions about the forms.

 

[Artemis Eleutheria]

Be

An accountant asked $500 to file those 2 forms which seems a lot since i'm not US citizen, not US resident, not selling in US. Is there any tutorial on how to correctly file those forms?

You will also need an EIN for your LLC before you file

https://www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/

 

[Marzio]

Thanks for the helpful answers guys! It will probably worth timewise to let the accountant apply for my EIN and file the forms the first time. Once i'll see how this is done i could probably file the forms in the future by changing relevant informations accordingly.

 

[Artemis Eleutheria]

I think there are some concerns with this option:

1. There is the risk of a $25k fine if you make a mistake on your filings > Form 5472 & Foreign-owned US Single-Member LLCs | LLC Univeristy®
2. The rules may change at any time, subject to the whims of politicians and bureaucrats (both inside and outside the US).
3. Since the LLC is transparent from the US view you avoid taxes in the US, however it does not solve the tax liability of the owner wherever the owner is resident (sticking a BVI IBC, or similar in as an owner does not help as most countries look to UBO today and that is increasingly a matter of public record).

 

[Marzio]

I think there are some concerns with this option:

1. There is the risk of a $25k fine if you make a mistake on your filings > Form 5472 & Foreign-owned US Single-Member LLCs | LLC Univeristy®

That's why i want the accountant to file those forms the first time.

3. Since the LLC is transparent from the US view you avoid taxes in the US, however it does not solve the tax liability of the owner wherever the owner is resident (sticking a BVI IBC, or similar in as an owner does not help as most countries look to UBO today and that is increasingly a matter of public record).

Problem solved by moving to a territorial taxation country.