So register for sales tax only in states where you have “soft nexus”, and register foreign entity and sales tax in states where you have "hard nexus"
Ok, the question of sales tax should be more or less clear by now. Let’s proceed to more
complex topic of income tax.
Ok, the question of sales tax should be more or less clear by now. Let’s proceed to more
complex topic of income tax.
Q. I am a single owner of a U.S. LLC, non-U.S. person living abroad. My company provides remote services. Do I need to file tax return and pay income tax?
A single member LLC that elected to be a disregarded entity (a default election) would only pay tax based on the tax status of the owner. Since the owner is not physically present in the US and is providing services remotely there would be no income effectively connected to the US. That means the LLC would owe no US tax, except for the annual registration fee in the state of LLC registration, and there would be no US federal tax obligation (in other words there is no requirement to file income tax either).
Keep in mind though - you might not technically be producing income in the U.S., but you still could be (and chances are) liable to income tax on this income in your country.
Q. What if I import and sell goods in the U.S. - does it change the previous answer?
If your business is selling tangible goods in the US, you are required to report the income from this business to the IRS. Non-US residents report their US sourced income on form 1040NR.
Don’t try to figure this form out - it is our recommendation to hire a CPA to handle all your U.S. tax issues. You will also need to obtain ITIN, something your CPA will be in the best position to assist you with.
Q. What if the LLC has more than one owner? What happens then?
LLC that has more than one owner (partnership), or if it is elected to be taxed as S or C Corporation (any number of owners), must file federal tax return, even if it has zero income.
Q. Ok, I got the point about LLC. But what if it’s corporation instead?
A corporation is a separate tax entity from its owners. That means the corporation files its own tax return and pays its own tax liability. That also means that one cannot freely transfer money between the owners (shareholders) and the corporation. The corporation can reimburse the