Tax Filing Requirements for Non-Resident Foreign Owners of LLCs in the US

When you incorporate an LLC in the United States as a non-resident, navigating the tax landscape can be complex. This article provides a comprehensive overview of the tax filing requirements for non-resident foreign owners of LLCs, helping you understand the necessary forms and deadlines and ensuring you comply with U.S. tax laws.

Understanding the Basics

The intricacies of U.S. tax laws can be overwhelming for non-resident foreign owners. To simplify the process, it's essential to familiarize yourself with the key tax forms and filing requirements. Here, we will break down the necessary steps and forms you need to complete and the deadlines for submission.

Who Needs to File?

Non-resident foreign owners of LLCs must file specific forms with the Internal Revenue Service (IRS) to ensure compliance with U.S. tax laws. Whether you are the sole member of the LLC or share ownership with others, the requirements may vary.

Single Member LLC and Non-Engagement in US Trade or Business

If you own an LLC and are not considered to be "Engaged in US Trade or Business," you are generally not required to file a 1040NR (U.S. Income Tax Return for Non-Resident Aliens). However, you may still need to file a 1120 (U.S. Corporation Income Tax Return), which is required if you have elected to treat your LLC as a corporation.

Engaged in US Trade or Business

If you are considered to be "Engaged in US Trade or Business," you may be required to file a 1040NR and pay personal income taxes. This status depends on your level of activity and the specific nature of your business operations in the U.S.

Forms to Submit

The following forms are commonly required for non-resident foreign owners of LLCs, regardless of whether they are engaged in U.S. trade or business:

1120: U.S. Corporation Income Tax Return

If you have elected to treat your LLC as a corporation, you are required to file a 1120. The 2019 Instructions for Form 1120 provides detailed guidance on how to complete this form.

5472: Information Return of a 20 Percent or Greater Shareholder

Whether you file as a non-resident or as a corporation/LLC, the 5472 is necessary if your LLC meets certain thresholds of related party transactions. This form requires reporting of intercompany transactions and equity holdings. For detailed instructions, refer to the 12/2019 Instructions for Form 5472.

Deadlines and Extensions

To ensure timely submission and compliance, it's crucial to adhere to the following deadlines:

Tax Return Deadlines

April 18, 2022: Deadline for LLC tax returns when filing as a Foreign-Owned Disregarded Entity (Forms 1120 and 5472) or requesting a six-month extension of time to file. April 18, 2022: Deadline to file individual tax returns for foreign individuals (Form 1040NR) or requesting an extension for an extra six months to file your return.

For additional help, extensions can be requested by contacting the IRS.

Can I Fill Out These Forms on My Own?

While it is possible to complete these forms on your own, it's important to ensure accuracy to avoid penalties. Our full guide can help simplify the process and ensure you meet all requirements. To assist with your filing, consider using services like dooTa, formerly StartPack.

About the Author

While I am not a tax or legal professional, I aim to provide you with accurate and useful information. For detailed and professional advice, consider consulting a tax or legal expert who is dual-qualified in the U.S. and your home country.

Note: This post is for general information purposes only and does not provide official tax or legal advice.