Let’s start from a little disclaimer: U.S. taxation of nonresidents can be a fairly complex issue and involves many specific fact points that determine if the non-residents are subject to US taxation or not.
It is impossible to know your specific tax obligations without a lot more information about your U.S. related business, so please use the information presented here for reference only. If you need more specific tax advice refer to the information at the end of this article.
Ok, now that we have cleared this very important point, let’s move on and analyze a few of the most common cases. Each of the question types (general, sales, and income tax) are listed in this collection as individual pages.
General Taxation Questions
- What are the main types of business taxes in the U.S.?
- Are there any other taxes I should be concerned about?
- How does U.S. income tax work?
Sales Tax Questions:
- How does the sales tax work?
- How do I know if I need to apply sales tax on the stuff I sell?
- Should I register in a state that has no sales tax, to avoid having to deal with it?
- If I am registered in one state, but my vendors are drop shipping the stuff I sell in other states - which state do I need to collect sales tax in?
- I know that I need to collect sales tax. How do I register?
- After I register, how do I do reporting and remit sales tax?
- My business is registered in one state, but my supplier is in another. They want me to show sales tax registration in their state - how do I do it?
- I want to buy products in the U.S. and sell them in my country - do I need to register for sales tax?
- How do I report sales tax in all the states I am registered in?
- Do I need to register as foreign entity in states where I am registered to collect sales tax?
Income Tax Questions:
U.S. Business 100% Owned by Non-U.S. Person(s)
- 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?
- What if I import and sell goods in the U.S. - does it change the previous answer?
- What if the LLC has more than one owner? What happens then?
- Ok, I got the point about LLC. But what if it’s corporation instead?
- What is the best way to reduce the taxable income of my LLC or Corporation?
- Ok, let’s talk about wages. Can I pay myself a salary as a corporate officer, this way avoiding double taxation?
- What if we spend all or most of the income of the U.S. company on services provided by our other company, registered in our country?
- What if we retain all the corporate profits in the U.S., pay the corporate income tax, and not distribute it to shareholders? Can we just reinvest this money into the business?
- So given all the owners are non-U.S. persons, from income tax point of view is it more beneficial to register LLC or Corporation?
- How and when do I file tax return?
- Do I need an ITIN to file taxes? If yes, how can I get it?
- What about state income tax?
- Should I register my company in the state that has no income tax?
- I heard as non-resident alien I need to pay 30% income tax on my U.S. income. Is it true?
- What is form W-8BEN, and when do I need to file it?
- What about tax treaty between U.S. and my country? How does it influence my income tax obligations?
U.S. Business Owned by U.S. and Non-U.S. Partners
- Is there any disadvantage of having a U.S. partner in the company owned by non-resident aliens?
- Since we have a U.S. partner in our corporation, can we elect it to be S Corporation?
- I am US citizen and I want to open a business with a 50% partner who is a non-resident alien living abroad. What type of taxes will my partner pay if we form a C Corporation?
- Double taxation doesn’t sound like a good idea. What if we choose LLC (taxed as partnership) instead?
U.S. Business Owned by a Foreign Business
- [Can a non-U.S. company own a U.S. company?]
- Is it better to own the U.S. company with my non-U.S. company from tax point of view?
- I own a company in my country, and I want to register an LLC to be owned by this company. Can I then distribute U.S. profits of this LLC to my company, and pay the taxes in my country?
- What if I own the U.S. company with my non-U.S. company, and the non-U.S. company will sell the U.S. company products for resale for the same price the U.S. company will sell them in the U.S.? I want to avoid having to pay taxes in the U.S.
U.S. Business Owned by U.S. Person(s) Living Abroad
- I am US citizen and a sole owner of an LLC. I live abroad, and my business is online only, without any physical connection. What kind of tax would I have to pay?
- I am U.S. citizen living abroad. Is there a way for me to run a business from abroad and avoid being taxed in the U.S.?