Understanding US Taxes for Non-Resident Business Owners
Taxation in the United States can seem complex, especially if you’re a non-resident entrepreneur. But understanding how US taxes apply to your LLC or C-Corp is crucial for compliance and peace of mind.
1. Federal vs State Taxes
Every US business must consider both federal taxes and state taxes.
- Federal Taxes: Apply nationwide (managed by the IRS).
- State Taxes: Depend on where your company is registered (Delaware, Wyoming, Florida, etc.).
2. How Nn-Residents Are Taxed
- LLCs: Pass-through entities. Income “passes” to owners, who may file taxes in their home country if a tax treaty exists.
- C-Corps: Pay 21% corporate tax in the US. Non-resident shareholders pay tax only on dividends or US-source income.
3. Key IRS Forms
- Form 1120 – C-Corp tax return
- Form 1065 – Partnership/LLC return
- Form 5472 – Required for foreign-owned LLCs
- W-8BEN – Declares non-US tax status for individuals
4.Avoiding Double Txation
The US has tax treaties with many countries (UK, UAE, Pakistan, India, etc.). A qualified accountant ensures you apply the right treaty benefits and claim foreign tax credits.
Final Thoughts
Cross-border taxation doesn’t have to be overwhelming. Startitup Global helps international founders file correctly, apply tax treaty benefits, and stay compliant across jurisdictions.
