Taxes overview

How the company is taxed depends on its entity type and its choices. An LLC with one member is usually treated as part of its owner. An LLC with several members is usually a partnership. A corporation is taxed as its own taxpayer. An LLC can ask to be taxed as a corporation.

Foreign owners may face different rules, including special reporting forms. Whether income is taxed in the United States, in the owner's country or in both, depends on the type of income, where the work is done and tax treaties. Do not assume that having no U.S. presence means having no obligations.

States may charge income tax, franchise tax, annual fees or none of these. Each state sets its own rules, and forming in one state while operating in another can create obligations in both.

Companies with employees must withhold and pay taxes on wages. An EIN is required.

If you sell goods or some services, you may need to collect sales tax in the states where you have a connection. The rules vary widely.

Owning a company abroad can trigger reporting or tax in your country of residence. This is often the most important question for founders outside the United States.

We provide general information and reminders. We do not prepare tax returns or advise on your tax position.

For anything that depends on your facts, speak with a licensed tax professional.

This is general information, not legal or tax advice.