Tax guides
Guides to US federal and state rules, grouped by topic.
Forming a single-member LLC usually does not change a sole proprietor's federal income tax. Moving a business into a corporation may also avoid immediate gain, but cash received, insufficient ownership control, or debt above the assets' tax basis can make it taxable. Converting a C corporation to a pass-through LLC can create tax at both the corporation and shareholder levels.
Self-employed · Partnerships · Corporations
First check the IRS's recorded effective date. If a timely Form 8832 went missing, submit filing proof. If the intended date is beyond the ordinary 75 days window, eligible LLCs request relief on Form 8832 under Revenue Procedure 2009-41 within 3 years and 75 days of that date, with reasonable cause and consistent returns. Until corporate status applies, the owner or partners report income.
Self-employed · Partnerships · Corporations
Confirm the IRS's recorded effective date; a lost CP261 does not cancel an accepted election. A late Form 2553 may qualify for Rev. Proc. 2013-30 relief, usually within 3 years and 75 days, if the business was eligible, had reasonable cause, corrected the error diligently, and reported consistently. Missing consents or ineligible owners need separate review.
Self-employed · Partnerships · Corporations
A default LLC passes profit and potentially usable losses to its owners, even if they leave cash in the business. That can matter when owners need distributions or can use early losses. A C corporation pays its own tax and may suit a planned qualifying stock sale, but dividends add owner tax. Compare state costs and annual cash needs before forming.
Self-employed · Partnerships · Corporations
If you alone own both a rental or home and a disregarded single-member LLC, deeding the property to the LLC generally leaves your federal income tax reporting unchanged. Adding owners can require a partnership return. A change in ownership, mortgage debt, state property or transfer tax, and annual LLC charges can change the result.
Individuals · Partnerships
First map legal and federal ownership, S eligibility and state filings. A DBA adds no taxpayer or return. One-owner LLCs usually report through owners; multi-owner LLCs usually file Form 1065. Corporations file Form 1120 or 1120-S. Holding LLCs follow their classification. Sole proprietors, partners and S shareholders pay tax on their shares; C corporations pay their own tax.
Self-employed · Partnerships · Corporations
An S corporation election can pay off when profit is well above a reasonable owner salary, since distributions beyond it carry no employment taxes. Payroll, a yearly Form 1120-S and any state tax cut into the saving. An eligible corporation or LLC elects on Form 2553, signed by all shareholders, by 2 months and 15 days into its tax year.
Self-employed · Partnerships · Corporations
A domestic LLC owned by two spouses or other family members generally files Form 1065 unless taxed as a corporation. Spouses who own a qualifying LLC entirely as community property may report it as a disregarded entity on the applicable owner schedule. Separate returns can still require community-income allocation. An LLC cannot elect qualified joint venture status.
Individuals · Self-employed · Partnerships
An eligible calendar-year C corporation can elect S status for January 1 by filing Form 2553 by March 15 (or the next business day). The switch usually triggers no immediate tax. Later, old C earnings can fund dividends after S-year income, and pre-switch asset gains can face corporate tax. Model these costs before electing.
Corporations
First, verify the approved state filing and get an EIN if required. California LLCs and stock corporations file an initial statement within 90 days of registration; most New York LLCs file publication proof within 120 days after formation. Set up owner records, banking, and required tax accounts before taxable sales or wages; calendar elections. Owners report disregarded LLC, partnership, or S corporation income; C corporations generally pay their own income tax.
Self-employed · Partnerships · Corporations
An LLC or corporation formed elsewhere must register where local work meets the state's test; first map activity and file the entity's form. Sole proprietors have no separate entity to qualify; partnership type controls filing. A late-filing entity owes fees and penalties. Its owners generally do not pay solely for missed registration; sole proprietors owe their own obligations, and general partners may owe partnership debts.
Self-employed · Partnerships · Corporations
First, value capital; agree on profit, cash, control, and exits. In a partnership-taxed LLC, a qualifying profits interest avoids grant tax; the worker generally pays tax on a capital interest for services, and both members pay tax on allocated income without cash. S shareholders pay tax without cash; their shares need equal economic rights, and working owners need reasonable wages.
Partnerships · Corporations
Check work permission, tax residency, owners and elections first; visa status does not choose the return. Without a corporate election, a sole owner reports income on Form 1040 or 1040-NR, and foreign ownership may require Form 5472. Multiple owners generally file Form 1065; partners pay tax. A C election makes the LLC pay tax; eligible S shareholders pay it.
Individuals · Self-employed · Partnerships · Corporations
If you live and operate in one state, usually form there. Forming elsewhere adds an agent and annual charges, while your operating state may still require registration and tax. Compare Delaware for complex corporate share rights. The entity pays state charges; owners report income passed through from a disregarded LLC, partnership or S corporation.
Self-employed · Partnerships · Corporations
First map sales, work, workers and property by state; file wherever that state's income or franchise tax rules require it, even without an office. Sole proprietors file and pay personally. Partnerships file entity returns while partners pay on shares. Corporations pay entity taxes; S corporations can also pass taxable income to shareholders. A sales-tax permit alone does not decide.
Self-employed · Partnerships · Corporations
A genuine business loss may reduce wages and other income on your individual return, including a spouse's wages on a joint return. First check basis, at-risk and passive loss rules, then the annual excess business loss limit. Unused losses may carry forward under different rules. A hobby or C corporation loss cannot offset your wages.
Individuals · Self-employed · Partnerships · Corporations
Favor assets for new basis: you report operations and file Form 8594 when required, though successor tax may follow. Stock gives share basis; the corporation keeps debts and files its return. A disregarded or wholly acquired partnership-taxed LLC follows assets; a continuing interest gets interest basis; a corporation-taxed LLC follows stock. Check liens and state clearance before paying.
Self-employed · Partnerships · Corporations
Identify who pays, rebuild basis and debt shares. A direct partnership or S corporation share sale taxes the seller; direct buyers cannot deduct the price. A partnership redemption can create distribution gain or ordinary income; an S corporation redemption can be a sale or distribution. Both issue K-1s. A partnership-taxed LLC reduced to one owner files a final Form 1065.
Partnerships · Corporations
Usually, yes if the LLC or corporation is registered or doing business in California. An inactive registered entity can still owe the annual $800 LLC tax or $800 corporation minimum tax. An out-of-state entity can owe it without registering if it does business in California. First-year and short-year exceptions may change the result.
Self-employed · Partnerships · Corporations
Check notice deadlines first, then confirm how the business was taxed in each missing year. Rebuild records from the oldest year forward, reconcile payroll, and file partnership or S corporation returns before owners prepare or correct returns using their Schedules K-1. Address state filings alongside federal ones. File even if the business cannot pay in full.
Self-employed · Partnerships · Corporations
Compare filed K-1s, owner copies, and returns. A centralized-rule partnership generally files an AAR, pays any imputed underpayment, and sends Forms 8986 for passed-through adjustments; partners use Form 8978 or pass adjustments. Elected-out partnerships amend Form 1065 and K-1s. An S corporation amends Form 1120-S and K-1s; shareholders pay tax due. C corporations amend Form 1120-X and pay tax due.
Partnerships · Corporations
A US corporation generally spreads software development performed in India or another foreign country over 15 years, starting at the tax year's midpoint. Qualifying US development is generally deductible when paid or incurred, unless the corporation elects to amortize it. First, separate costs by where each development task was performed.
Corporations
A Delaware corporation's notice can be high because the state initially uses its authorized shares, even when few shares were issued. A corporation with par value stock may lower the current bill by reporting issued shares and gross assets so Delaware can compare the assumed par value capital method. LLCs and partnerships pay a separate flat annual tax.
Corporations · Partnerships
A US C corporation pays federal income tax on its own taxable profit at 21% and generally files Form 1120 each year. Dividends paid from its earnings can then be taxed to shareholders, without a corporate deduction. Owner wages run through payroll; business losses stay with the corporation. Estimated payments and separate state filings may also apply.
Corporations
A domestic LLC's federal tax treatment depends on its owners and elections. By default, a one-owner LLC is disregarded for income tax and its owner reports the activity; an LLC with multiple owners is taxed as a partnership. An eligible LLC can elect C corporation or S corporation treatment. State taxes and filing duties can still apply separately.
Self-employed · Partnerships · Corporations
A partnership or multi-member LLC taxed as a partnership generally files Form 1065 but does not pay federal income tax on its profit. It gives each partner Schedule K-1, and each partner reports their share on their own return, even if no cash was distributed. Payments, losses, state taxes, and audit adjustments can change the result.
Partnerships
An S corporation usually passes its income, losses, deductions, and credits to shareholders instead of paying federal income tax on ordinary profit. Shareholders report their shares whether or not cash is distributed. The corporation files Form 1120-S and gives each shareholder a Schedule K-1. Distributions depend on stock basis; former C corporations and states can face additional taxes.
Corporations
A late partnership or S corporation return can trigger a monthly charge for every owner, even when no tax is due. A C corporation's federal filing and payment penalties generally depend on unpaid tax. A timely filing extension generally postpones the filing deadline, not the payment deadline. The IRS may remove qualifying penalties through automatic relief, small-partnership relief or reasonable cause.
Partnerships · Corporations
Online sellers report taxable profit, not just marketplace payouts or the amount on Form 1099-K. A business seller subtracts returns, the cost of goods sold and allowable selling expenses from sales, then may owe income and self-employment tax. Personal items sold at a loss have no taxable gain; warehouse inventory can also trigger state filing duties.
Individuals · Self-employed · Partnerships
A state pass-through entity tax election may help when the partnership or S corporation can deduct the tax federally and its owners receive usable state credits. Compare every owner's federal deduction, state credit and other-state taxes before electing. A higher personal SALT limit has reduced the benefit for some owners; deadlines and eligibility depend on the state.
Partnerships · Corporations
Price alone does not set the tax. For a C corporation, a stock sale generally taxes the shareholder once; an asset sale taxes the corporation and may tax shareholders again on a payout. For S corporations and partnerships, either structure usually creates one level of tax, but asset gains can be ordinary. Compare after-tax cash using each offer's terms.
Self-employed · Partnerships · Corporations
Texas LLCs and corporations are generally subject to franchise tax, even if federally disregarded. For the 2026 report, annualized total revenue at or below $2,650,000 generally means no tax report or payment, but a Public Information Report remains due. To fix forfeiture, file missing reports and pay balances. Secretary of State reinstatement also needs a tax clearance letter.
Self-employed · Partnerships · Corporations
A US citizen or resident who owns a foreign company may need Form 5471, even if the company pays no dividend. The filing category depends on control, share transactions, and ownership by other US persons. If the company is a controlled foreign corporation, some income may also enter the owner's US return before any cash is paid.
Individuals · Corporations
Your federal return follows your business's tax classification, not just its LLC label. A sole proprietor or disregarded single-member LLC generally reports business activity on the owner's return. A partnership files Form 1065, an S corporation files Form 1120-S, and a C corporation files Form 1120. No income does not automatically remove a filing duty, especially for corporations or state returns.
Self-employed · Partnerships · Corporations
Confirm how the business is taxed and when its first tax year ends. Reconcile income, expenses, owner transactions, and pre-opening costs; then prepare the applicable return and any owner schedules. Check payroll, information, and state filings separately. File by the deadline for that return, or request an extension and pay any tax due on time.
Self-employed · Partnerships · Corporations
First check which forms were required and whether your US returns reported related income. Late FBARs, delinquent information returns, and Streamlined Domestic have different rules. Streamlined Domestic generally requires any required returns to have been filed for each covered return year, unpaid tax on omitted foreign-financial-asset income, and non-willful conduct. Possible willfulness, IRS contact about the missing forms, or an IRS investigation calls for individual review.
Individuals
List every year a US Form 1040 was required, then get IRS transcripts, notices, and your own records. The IRS normally enforces six years, but every required year remains due; file even if you cannot pay. Each year's bill may include unpaid tax, late-filing, late-payment, and estimated-tax penalties, plus interest. Refund claims generally expire after three years.
Individuals · Self-employed
Giving up US citizenship or ceasing to be a long-term resident for US tax purposes can trigger exit tax if you meet a covered expatriate test. A green card holder first needs at least eight of the last fifteen qualifying tax years; a treaty-residence claim can end that status. Covered expatriates may owe tax on unrealized gains and retirement benefits. Citizens and long-term residents file Form 8854.
Individuals
Check each year's tax residence, treaties, and elections. If Form 1040 was wrong, file Form 1040-X with Form 1040-NR and required Forms 8843 or 8833; pay added tax, which both spouses may owe on a valid joint return. For exempt visa wages, ask the employer to refund Social Security and Medicare tax, then use Form 843 if needed.
Individuals · Self-employed
US citizens and green card holders generally must file when worldwide gross income meets the filing threshold, even with no US-source income or when an exclusion removes the tax. Foreign pay can be taxed, but eligible workers may claim the foreign earned income exclusion or a foreign tax credit. Self-employed workers may still owe US self-employment tax.
Individuals · Self-employed
If you become a US tax resident partway through the year and remain resident at year end, a required return is generally dual-status: Form 1040 with a nonresident-period statement. Find your start date under the green card test, substantial presence, or first-year choice. Report worldwide income after that date, taxable US income before it, and check foreign-account and state filing.
Individuals
File an FBAR (FinCEN Form 114) with FinCEN if the highest balances of foreign accounts you own or can sign on total more than $10,000. Attach Form 8938 to your tax return if your foreign assets pass its higher threshold: unmarried or married filing separately in the US, over $50,000 at year end or $75,000 anytime. You may need both.
Individuals · Self-employed
If you are a US citizen or tax resident, report taxable income from abroad on your US return even if it stays overseas. Report each item by income type, convert it to US dollars, then check whether a treaty changes its tax treatment. A foreign tax credit can reduce US income tax on qualifying foreign-source income, subject to limits.
Individuals
First identify what you legally own. Shares of a foreign fund may be passive foreign investment company (PFIC) stock, requiring Form 8621 for each fund and special tax calculations on distributions or sales. A bank deposit, debt claim, direct holding, or US fund bought abroad follows different rules. The product documents, purchase records, and your US residency date determine the answer.
Individuals
A genuine gift or inheritance from family abroad is generally excluded from US income. If you are a US person and receive more than the reporting threshold from a foreign donor or estate, you generally file Form 3520 even when no income tax is due. Foreign trusts and company payments follow different rules.
Individuals
First identify the owner, insured, and US contract type. A US owner may need FBAR and Form 8938 for foreign cash value; buying before US residency does not erase later duties. Tax may apply to growth or payouts, and the premium payer may owe Form 720 excise tax. Beneficiaries generally exclude qualifying death proceeds but report interest.
Individuals
First confirm tax residency. Generally file dual-status Form 1040-NR if resident part-year and nonresident at year end, Form 1040 if resident at year end, or Form 1040-NR if nonresident all year and required. Green-card and treaty rules or a spouse election can change filing. You owe any balance; your 401(k) may stay, while withdrawals can trigger withholding and early tax.
Individuals
You may file jointly if you are a US citizen or tax resident at year-end, your spouse is a nonresident alien then, and you both elect to treat your spouse as a US resident for income tax. The election brings both spouses' worldwide income onto the return and continues in later years. The choice depends on income, foreign tax, reporting, and later-year effects.
Individuals
US citizens and residents generally report rent and taxable gains from a home abroad on their US return. Foreign rentals have different depreciation rules, while a qualifying main home abroad can use the US home-sale exclusion. Convert each transaction to US dollars, then check whether foreign income tax can reduce the US tax on that income.
Individuals
For US citizens and residents, rental income is generally taxable on Schedule E, but ordinary rent is usually exempt from self-employment tax. You can deduct eligible expenses and depreciation, while improvements usually must be depreciated. Passive-loss rules often prevent rental losses from offsetting wages. Personal use, guest services, and a sale can change the result.
Individuals
First verify required returns and a green card holder's resident or treaty position; consult immigration counsel before changing a nonresident filing. For naturalization, file missing returns and document overdue-tax arrangements. For I-864, the petitioner supplies the most recent tax year's federal return or proves no filing duty; older returns are optional. Support liability begins at immigrant admission or adjustment.
Individuals
If you are a US tax resident and perform your employee work in the US, you owe US income tax on generally US-source wages, even when the employer pays from abroad. First confirm residence and workdays. Foreign withholding on US workdays usually cannot offset US tax; seek a foreign refund and have the employer check US payroll and social security coverage. Make US estimated payments if needed.
Individuals
Sole proprietors and disregarded LLC owners may buy personally or through the business; federal deductions follow documented business use. A partnership or S corporation may own and depreciate its car or reimburse owner business driving. Check classification, title, and mileage records first. Owners pay tax on taxable personal use; employers handle payroll. The 6,000-pound rule never guarantees a full write-off.
Self-employed · Partnerships · Corporations
An S corporation owner with more than 2% ownership may deduct premiums when the corporation pays or reimburses them, includes them in W-2 box 1, and the owner has enough wages. A partner generally needs partnership payment or reimbursement reported as a guaranteed payment. Both deductions are limited by business income and months eligible for subsidized employer coverage.
Self-employed · Partnerships · Corporations
Your business may lower federal tax by claiming documented business expenses, choosing eligible equipment write-offs, using the qualified business income deduction, funding a retirement plan, and claiming credits it qualifies for. Entity and state choices can matter too. The right mix depends on profit, employees, cash needs, asset use, and your state's rules.
Self-employed · Partnerships · Corporations
For federal tax, your S corporation salary is not qualified business income (QBI). Higher salary usually lowers pass-through QBI but may help the wage limit above the threshold. Keep pay reasonable. You pay tax on your profit share even without a distribution and claim the deduction using the K-1 statement. Partners' guaranteed payments remain taxable but are excluded from QBI.
Corporations · Partnerships
First, document business use. An S corporation can reimburse its shareholder-employee through an accountable plan requiring timely proof and return of excess; a written plan is optional. Qualifying payments are excluded from wages, while failed payments are taxable wages subject to corporate payroll taxes. Partners should check the partnership agreement: required unreimbursed business costs may be deductible on Schedule E.
Partnerships · Corporations
File overdue payroll returns despite unpaid tax, and keep new deposits current. A filed Form 941 does not cure a late deposit. The IRS may remove one qualifying period's penalty; later periods need separate grounds. Sole proprietors and most general partners owe payroll tax personally. At corporations and LLCs, responsible people may face trust fund liability for willful nonpayment.
Self-employed · Partnerships · Corporations
Cash and electronic transfers do not change worker status. Review who controls the work and check section 530; if employee treatment is required, start payroll and correct affected returns. The business owes employment taxes. Sole proprietors and general partners can owe them personally; responsible corporate officers and others can owe a trust-fund penalty for willful failure to collect or pay withholding taxes.
Self-employed · Partnerships · Corporations
Record work and residence states and change dates first. Sole proprietors, partnerships, and corporations must register where required, withhold and remit state and local wage taxes under both states' rules, and pay unemployment tax to the covering state; some states also collect worker contributions. Remote work can trigger business income or franchise tax in the work state.
Self-employed · Partnerships · Corporations
Yes, if your child does real business work and receives reasonable wages, the business can generally deduct the pay. Federal payroll tax exceptions depend on your business structure and your child's age; they do not apply to a corporation's wages. The child may owe no federal income tax on modest wages, but payroll reporting still applies.
Self-employed · Partnerships · Corporations
Verify amounts, furnish missing 1099-NECs or W-2s, then file 1099-NECs with the IRS and W-2s with Social Security. Separate filing and statement penalties fall on the filer: a sole proprietor personally, or the partnership or corporation. Prompt correction can reduce them; reasonable cause may remove them. Answer Notice 972CG within 45 days (60 for foreign filers).
Self-employed · Partnerships · Corporations
Before paying, collect a foreign individual's W-8BEN, a foreign corporation's W-8BEN-E, or the matching entity form, plus work-location proof. Foreign work generally needs no US withholding, 1099-NEC, or 1042-S. For US workdays, allocate pay; withhold unless exempt and generally file 1042-S/1042 even if exempt. The payer owes missed withholding. A US person abroad uses W-9 and 1099-NEC rules.
Self-employed · Partnerships · Corporations
If your LLC is taxed as a sole proprietorship, pay yourself with an owner's draw. If taxed as a partnership, use distributions or agreed guaranteed payments. Draws and ordinary distributions are not business deductions or separately taxed as pay; owners report business profit whether or not they withdraw it. Partnership distributions above tax basis can create gain.
Self-employed · Partnerships
First project the owner's full federal tax and wage withholding. The owner pays any remaining required federal installments through Form 1040-ES or covers them with extra wage withholding; pass-through profit is taxable without a distribution. The corporation pays its own payroll deposits and estimates only for specified entity taxes. State owner and company payments may also apply.
Corporations · Individuals
If you work for your S corporation and take money or property from it, pay yourself reasonable W-2 wages for your services before treating the rest as distributions. The IRS sets no fixed dollar amount or salary-to-distribution ratio. Use your duties, time, comparable pay, and the source of the corporation's income to support the amount.
Corporations
Before first pay, get the employer EIN and required work-state accounts, collect I-9 and withholding forms, set wages and payday, then calculate and deposit employee withholding and employer taxes; calendar returns, W-2s and new-hire reporting. Sole proprietors, partners and disregarded LLC owners do not pay themselves wages; working corporate owners generally do.
Self-employed · Partnerships · Corporations
If you should have collected state sales tax, work out when your duty began and which sales were taxable, then address the unpaid tax with each state. Before registering or filing old returns, check whether a voluntary disclosure agreement is available. The seller can remain liable for tax it never charged; collected but unpaid tax needs separate attention.
Self-employed · Partnerships · Corporations
First check each permit’s assigned filing schedule and any local account. File even for zero-sales periods while returns are required; report direct and marketplace sales in the state’s fields. File missed returns from actual records, pay tax due, answer estimated bills, and close permits formally. The registered business pays tax due; a sole proprietor owes it directly, and people handling an entity’s tax can also become personally liable under state law.
Self-employed · Partnerships · Corporations
Yes. A business based in Canada or another country may have to register and collect a state's sales or use tax when its sales into that state meet the state's rule, even if it ships from abroad and has no US company. Marketplace collection can change who remits tax, but registration rules still vary by state.
Self-employed · Partnerships · Corporations
You may have to collect sales tax in a state where your business has physical presence or where sales into the state cross its economic nexus threshold. The threshold, sales counted, and start date differ by state. First check where you have people or inventory, then total sales by destination and sales channel, and confirm whether what you sell is taxable.
Self-employed · Partnerships · Corporations
Identify tax status; pay wages and debts; follow state termination steps. A disregarded LLC's owner reports activity; partnership LLCs file Form 1065, S corporations Form 1120-S, and C corporations Form 1120. Corporations may need Form 966. Partners and S shareholders pay passed-through gains; C corporations pay asset gains. Owners may owe distribution tax. Close state accounts and deactivate the EIN.
Self-employed · Partnerships · Corporations
Your move does not move the LLC or corporation. First identify where it operates. Keep it and register where required, convert if both states allow, or replace and close it. An address change preserves the EIN and S election; replacement may change both. Filings can continue in both states. The company pays entity taxes; owners pay tax on passed-through income.
Self-employed · Partnerships · Corporations
Check the company's formation-state record to see whether the registry, tax agency, or both changed its status. Clear the missed reports, agent requirements, returns, payments, and reinstatement filing that state requires. Then review federal and other state filings for the affected years. Reinstatement does not settle tax debts, confirm an S election, or erase liability from the lapse.
Self-employed · Partnerships · Corporations
Check each owner's tax status first. A two-owner LLC normally files Form 1065; a US individual files Form 1040, a nonresident individual Form 1040-NR, and a foreign corporate partner usually Form 1120-F. The LLC pays foreign-partner withholding. A C corporation pays tax and files Form 1120; shareholders report dividends, with foreign-payee withholding. Nonresident alien or corporate shareholders bar S status.
Partnerships · Corporations
For a calendar-year US C corporation, a valid Form 7004 makes Form 1120 and any required Form 5472 due October 15. File both by then. Pay tax by April 15, or June 15 if the corporation qualifies for the business and books abroad rule. A late Form 5472 can cost the corporation $25,000 even with zero income tax.
Corporations
A US C corporation may prepare its own Form 1120; an authorized officer signs even without an SSN or ITIN. Attach any required Form 5472. E-file, or mail if paper filing is allowed, using the address for the corporation's principal location. The corporation pays its tax separately, including by international wire from a foreign bank.
Corporations
A foreign-owned US C corporation generally files its first Form 1120 from the date it first has shareholders, assets, or business activity through its tax year-end, even if sales are zero. First confirm those dates, then report income and deductible costs. Start-up and organization costs generally wait until business begins. The corporation pays any tax and keeps its own losses.
Corporations
US sales or LLC ownership alone do not require Form 1120-F. First check US activity and LLC classification. A foreign corporation with a US trade or business generally files and pays any Form 1120-F tax, even with treaty relief. A disregarded LLC may separately file Form 5472; partnership and elected corporate LLCs file their own returns.
Corporations
A US C corporation generally files a full Form 1120 every tax year, even with no sales or taxable income. It attaches Form 5472 if it had a reportable transaction with a foreign or domestic related party. Payments to a foreign owner may also trigger withholding returns. State filings depend on where the corporation operates and was formed.
Corporations
A US single-member LLC owned by one foreign person must file a pro forma Form 1120 with Form 5472 attached for any year it has a reportable transaction with its owner or another related party, including contributions and distributions. For a calendar-year LLC it is due April 15, extendable with Form 7004, and must be faxed or mailed, not e-filed.
Self-employed · Corporations
A US partnership or multi-member LLC with a foreign partner generally withholds federal tax on that partner's share of effectively connected taxable income, even without a cash distribution. It pays installments with Form 8813 and files Forms 8804 and 8805. Separate withholding may apply to passive income, a sale of the interest, and state-source income.
Partnerships
A nonresident can generally own a US LLC or C corporation, but a nonresident alien cannot be an S corporation shareholder. A single-owner LLC usually passes income to its owner, a multi-owner LLC usually files as a partnership, and a C corporation pays its own income tax. Ownership, US activity, and state rules determine the actual filings.
Self-employed · Partnerships · Corporations
Check each year the US entity was subject to Form 5472 and had reportable related-party transactions. File each missing form with the required corporate return. Voluntary filing does not guarantee penalty relief, but you can explain reasonable cause. If you received a CP215 notice, meet its response deadline, cure any missing filing, and request relief with evidence.
Self-employed · Corporations
First identify each owner's US tax status, share, and rent collector. Nonresident owners owe US tax on US rent. The payer generally withholds on gross rent unless net treatment is documented; a collector who fails to withhold can owe that tax. Individuals elect net treatment on Form 1040-NR; foreign corporations use Form 1120-F. An LLC's classification controls. Reconstruct missed years.
Individuals · Corporations
First confirm nonresident status, including any treaty tie-breaker. For taxable US business income, file your own Form 1040-NR: report a direct or disregarded LLC business on Schedule C, or a partnership share from Schedule K-1 and claim any Form 8805 withholding. You owe tax on your share even without a payout. Self-employment tax usually does not apply; check estimates and state filing.
Individuals · Self-employed
If a US single-member LLC is disregarded for federal tax, its owner can generally transfer cash as an owner draw: the transfer itself creates no separate US income tax or dividend withholding, but the LLC's income may still be taxable to the owner. A C corporation can pay dividends, reasonable wages or fees, or repay a real loan; each has different sourcing, withholding and reporting rules.
Self-employed · Corporations
A wire from abroad is generally not income to a US C corporation if it buys shares or creates a genuine loan. Before sending money or paying company bills, document whether the corporation will issue shares or owe repayment. A foreign owner's loan and interest can require Form 5472; the corporation must withhold and report taxable interest paid to that owner.
Corporations
First check your entity's formation-state agent rule; an unformed sole proprietor needs no registered agent. Give the IRS your real mailing and physical addresses, even abroad. A US or foreign business can apply for a US account, but banks verify its location and identity, and payment platforms set their own checks. Remote opening and acceptance are institution decisions.
Self-employed · Partnerships · Corporations
Yes. A Delaware C corporation files Form 1120 and generally pays federal tax at 21% on worldwide taxable income, even when managed abroad. With no Delaware business, it owes no Delaware corporate income tax, but its annual report and franchise tax are due March 1 of the following year. Another state or its management country may also tax it.
Corporations
First confirm the subsidiary is a corporation for US tax. A US C corporation that wholly owns it files Form 5471 and Form 8992 with Form 1120, even without dividends; the parent pays any US tax. Use Form 8993 for a deduction and Form 1118 for a credit. Reportable related-party dealings may require Form 5472.
Corporations
A foreign company's US C corporation subsidiary files Form 1120 each year and one Form 5472 per related party with reportable transactions. First reconcile parent charges and obtain the parent's W-8BEN-E. Support prices at arm's length; withhold on taxable US-source interest and royalties, then file Forms 1042 and 1042-S by March 15 after the payment year. The subsidiary owes missed withholding.
Corporations
Contact a preparer now with prior returns, ownership records, books, bank statements, and related-party transactions. There is no official Form 1120-plus-5472 fee: missing books, related parties, loans, withholding, payroll, and late years increase work. The corporation owes its tax and remains responsible for the return. A calendar-year return with a timely Form 7004 is due October 15.
Corporations
A non-resident or foreign company owes US tax on business income effectively connected with a US trade or business, usually from US work or operations. It is taxed on net profit at regular rates. Work done outside the US is generally not taxed. A treaty can exempt profits not tied to a US permanent establishment, such as an office.
Self-employed · Partnerships · Corporations
To get overdue books tax-ready, rebuild each month from bank, card, invoice, payroll, and payment reports; separate business from personal activity; reconcile every account; and check income forms and prior-year balances. Use any available filing extension and pay tax due by the applicable payment deadline. Keep proof for each reported amount.
Self-employed · Partnerships · Corporations
You can keep your own books with software if you can record every business transaction, retain its support, reconcile accounts and produce figures for each required return on time. The IRS does not require a bookkeeper. Hiring one becomes useful when payroll, inventory, sales tax, multiple owners or a balance sheet make those tasks hard to manage reliably.
Self-employed · Partnerships · Corporations
Ask for the lender's exact checklist first. Give your filed personal return and income schedules, plus any partnership or corporation return and wage or dividend records that apply. You or a bookkeeper can prepare a current profit and loss statement unless the lender requires a CPA. A CPA can issue a letter only within a supportable scope.
Self-employed · Partnerships · Corporations
Start with each payout's settlement report and match its transactions to the bank deposit. Record sales once, fees and refunds separately, and processor-held money in clearing. Track tax you must remit as payable; a marketplace remits tax under its own duty. Reconcile Form 1099-K to gross payments, not deposits; track backup withholding separately.
Self-employed · Partnerships · Corporations
Not sure which rules apply?