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How does a Resident Alien, owner of a multi-member LLC report taxes? I do not work in the US.

Orlando, FL |

I am the owner of a multi-member LLC created in Florida; Let's call it XYZ LLC. I am a resident alien because I do spend a few months in Florida for another business for which I have a Visa for. I do not work for XYZ LLC while in the US, only when I am in my home country. I do have an SSN (obtained after F1 OPT); as far as I know this SSN will never expire and can be used for tax filing.

As far as I know, I am treated as a US citizen for tax purposes. Therefore the following forms will be used 1065, 1065 K1s, 1040, 1040 Schedule E, 1040-ES.

The business is made up of several websites generating affiliate commissions. As far as I know this is classified as "Foreign Sourced Income" and NOT "US Sourced Income" since I am working from my home country. Does it make a difference?

According to Google AdSense, any income generated by AdSense is foreign sourced income. It's my understanding this is a complex case and the law isn't clear on online businesses.

Attorney Answers 2

Posted

Looks like you have done lots of your own homework: good job!

If you are receiving income from the work you are doing abroad for this business, you are generally going to get taxed on that income in the place where you work. How do you get paid from your LLC? Management fees? This might reduce your tax liability and make life easier.

On the other hand, does the LLC make a profit and distribute profits to you? This might change things. I'm guessing the LLC is a Florida LLC?

You'd probably do best to have consultations with a couple lawyers to get a better grasp of your specific details. In any case, your LLC will likely need to file for taxes.

Total Mobility Law is an international law firm that lets companies do global business with the knowledge and confidence they need to comply in any country. Our answers on this site do not constitute legal advice, nor do they establish an attorney-client relationship. The only thing that can do that is a signed Engagement Letter and Fee Agreement, which you can get by contacting us through www.totalmobilitylaw.com.

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1 lawyer agrees

4 comments

Asker

Posted

Thank you for your input, Todd.

Asker

Posted

The income is deposited in a US bank account. The profits are split among members depending on their shares in the company. The LLC is indeed located in FL.

Asker

Posted

Let me remind you all work is done from outside the US. I only go to the US for my other job and/or vacations, however I spend enough time in the US to be classified as US Resident. I have another question for you. If I am working for XYZ LLC from abroad (I cannot legally work for it in the US), do I still have to fill out a 1040? None of the work is done in the US. Shouldn't I be paying taxes in the country I am working from?

Todd Matthew Heine

Todd Matthew Heine

Posted

Generally one pays taxes in the country where one performs the work. There may be some issues with corporate income taxes in the US and Florida. Feel free to give me a call to discuss at 425 351 9455. Or just email me at todd@totalmobilitylaw.com and we can set up a Skype chat.

Posted

If is a multi-member LLC as you mentioned, it is not treated as a disregarded entity, like a single member LLC would which means that instead of income reporting on a single member's personal taxes, the LLC itself would need to pay taxes. Does you LLC have a tax id #? As Counsel mentioned, the best thing to do is speak to a Tax/Business Attorney locally. Good luck to you.

DISCLAIMER: This answer is provided solely for informational purposes only. This answer does not constitute legal advice, create an attorney-client relationship, or constitute attorney advertising.

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3 comments

Asker

Posted

Yes, I have an EIN. I am confused with your answer. My LLC has more than one member which means it's a multi-member LLC; it's classified as a Partnership. As far as I know, members of a Partnership (or multi-member LLC) are required to fill 1040, 1040 Schedule E, 1040-ES. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Partnerships

Nishat Azam

Nishat Azam

Posted

In a single member LLC "all" income gets personally reported. But in a multi-member (yes, being taxed as a partnership) while individual members are required to report their individual incomes from the LLC not everything received by the LLC is reported in one member's tax return, hence it is not a disregarded entity.

Asker

Posted

Thanks for your replies. I am even more confused now though. In your first post, you say individuals do not report income on their personal taxes. I quote "... instead of income reporting on a single member's personal taxes, the LLC itself would need to pay taxes..." However, in your second post you say "...individual members are required to report their individual incomes from the LLC ..." I know individual members of the LLC report business income on 1040 Line 12. The amount is determined by how much shares the individual has in the LLC as stated on their K1's.

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