Hey everyone, future business owners!
My name is Tousif Akram, and I run this company, FormLLC. Today, I want to talk about something that was very confusing for me: taxes for people who do not live in the USA but own a US LLC. See, LLC, it’s like a small business, but with some legal protections. When I first started FormLLC, figuring out taxes was my biggest nightmare! But listen, I learned a lot, and I want to share it with you so things are easier.
Why Taxes are Important
Taxes, they are like a fee you pay the government to run your business. It is important to understand how they work for your LLC, especially if you are not from the USA. If you know the tax rules, you will not get in trouble and you might even save some money!
My Tax Worries
Since I don’t live in the USA, these were my biggest worries:
How much tax would I have to pay?How can I avoid paying tax twice, once in the USA and again in my home country?
How can I be sure I follow all the US tax laws?The US tax system, it can be very complicated. But don’t worry, with some work, you can understand it.
Tax Stuff for People Like Me
Here are the main things about taxes you need to know as someone who doesn’t live in the USA but owns a US LLC:
Federal Income Tax: This depends on how your LLC is set up. Most people who don’t live in the USA choose a setup where the money the LLC makes goes straight to the owners (that’s you!). This means you report that income on your normal tax return.
US Business Income: If your LLC makes money by actually doing business in the USA (like selling things or services there), you’ll owe US taxes on that money.
Withholding Tax: This is a kind of automatic tax taken out of certain types of income, like interest or if you sell something creative. The rate is usually 30%, but there might be an agreement, a tax treaty, between the USA and your home country that lowers it.
State Taxes: On top of federal taxes, you might also owe taxes to the state where your LLC is registered. Each state has its own tax rules, so you need to figure out what applies to you.Tip: Look into the tax laws of the state where your LLC is based. If you need help, talk to a tax advisor in that state.
How I Dealt with Taxes
Here are the things I did to manage my tax situation:
Tax Pros: Hiring tax advisors who know a lot about US taxes for people who don’t live in the USA was a big help. They know all the complicated tax rules and helped me stay on the right side of the law.
Record Keeping: Keeping track of all my income, expenses, and everything my LLC did was very important. This way, I had all the documents I needed if the government ever checked my taxes.
Tax Treaty Power: Tax treaties can make a big difference in how much tax you owe. I learned how the treaty between the USA and my home country affected my LLC’s taxes and saved myself some money in the process.
The Final Word
Figuring out taxes as someone who doesn’t live in the USA but owns a US LLC can be a challenge, but it’s definitely possible. By learning the basics, getting help from experts, and keeping good records, you can make sure your business is following the tax laws and is successful.
Thanks for reading about my journey! I hope this info helps you navigate the tax world for your USA LLC. If you want to learn more, check out my website (Tousif Akram) , FormLLC and Fiverr
