Tax paid by nonresident single member LLC

Seattle, WA Viewed 55 times. Posted 3 months ago in Tax

Hello and thank you for a chance to post this question for some clarification.

If I am a US nonresident alien and set up an LLC in Delaware, Oregon or Wyoming for example, and derive all my income from consulting arrangements from outside the US, do I reduce my federal tax liability to zero, since neither LLCs nor nonresident aliens pay tax on income outside the US?

Likewise, if I contract WITHIN the United States under this LLC structure, I believe I will have to pay tax using IRS form 1040NR, but will I be required to make estimated tax payments quarterly?

Any advice is appreciated and please contact me if you are a tax advisor who is knowledgeable about single member LLCs where the member is a nonresident alien.
Thank you!

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Answers (1)

Fabio Ambrosio

This attorney is licensed in Washington. Posted 21 days ago.

Hi, I like your question because it's complex and fun to handle. First of all, much of the answer depends on whether the LLC is electing to be treated as a partnership or as a corporation. This can make a HUGE difference in your case. Also, it is important to know what the LLCs do, what business they're in, how much income they derive from within the US. The mere fact that the sole member is a foreign individual may play absolutely no role depending on the specific facts.

Rules of international tax are very complex. Most lawyers have no clue how to work these problems. Your case involves issues of residency, sourcing, ECI, FDAPI, etc etc. I cannot give you good advice unless I know more about your situation.

Give me a call if you'd like to discuss this further. I can certainly help you with your situation but I would need to know a lot more facts about you, your LLC, their tax status, and the business in general.

Fabio Ambrosio
Attorney at Law
(206)801-0985
www.ambrosiolawfirm.com

Disclaimer: This answer does not create an attorney-client relationship and is for informational purposes only. It is not, nor is it intended to be, legal advice. You should consult your attorney for legal advice tailored to your individual circumstances.