NRA owning US LLC receives a 1099-INT of $300, do I need to file tax return?

[QWJLEGEND]

Hello, 

I am a NRA (holding B1 VISA), this year I received a 1099-INT for my LLC in US. Do I need to file tax return? 

[Anonymous_]

Paging @pk. Check back later.

[Vanessa A]

If you are a non resident alien, you will need to contact Sprintax.com to file your return.  TurboTax does not handle the form 1040NR which is the form you will need to file if you do need to file. 

[pk]

@QWJLEGEND , while generally agreeing with @Vanessa A , that if you are actually a Non-Resident Alien ( i.e. you have not met the  Substantial Presence Test ), you do not to report your US sourced income  on form 1040-NR ( not supported by TurboTax ).  However , my question is  (a) which country are you from ; (b) are you in the USA right now  or have been in the past ( years 2022, 2021 and 2020  are of interest ); (c) B-1 visa implies admittance for establishing a business -- have you  and if so when;

Please answer my questions and tell me all that you can to help me understand the situation, please

pk

[QWJLEGEND]

Thanks for getting back.  To answer the questions:

(a) which country are you from ;

China

(b) are you in the USA right now  or have been in the past ( years 2022, 2021 and 2020  are of interest );

I am not in USA right now. But I have been here in 2019. 

(c) B-1 visa implies admittance for establishing a business -- have you  and if so when;

My LLC was founded at 2021. 

Follow up on `you do not to report your US sourced income  on form 1040-NR`, right, if the 1099-int is sent to me directly, I wouldn't worry about filing the tax. But -- it is filed to my LLC, which is a US-based sole proprietorship entity, I wonder  if I can still treat it as a personal income, and waive it as per these two exceptions in 1040NR form: 

Exception 1. The interest will not be includible on line 2a of Form 1040-NR unless it is effectively connected with a trade or business. If the interest was not effectively connected with a U.S. trade or business and was U.S. source, report it on Schedule NEC (Form 1040-NR), line 2a, 2b, or 2c.

Exception 2. Do not include interest from a U.S. bank, savings and loan association, credit union, or similar institution (or from certain deposits with U.S. insurance companies) that is exempt from tax under a tax treaty or under section 871(i) because the interest is not effectively connected with a U.S. trade or business.

That being said, if I were to file the 1040NR, can I

1. Put my EIN in the "Your identifying number" section? 

2. Put the $300 as a non-taxable income? 

[pk]

@QWJLEGEND  so you  ,  NRA , own an US entity which has earned interest income and you want to report this .   Do you have a Tax id for yourself  ( an ITIN or SSN ).  If not then the disregarded entity cannot be treated as a dis-regarded entity  and must  file and pay its taxes as C-Corp  on form 1120.  This is because while the entity is a US person you are not and therefore  only option left to it is to either file as a C-corp when (single owner ) or as a partnership ( with multiple owners ).

Do you have any business income or just this bank earnings ?  Is this an on-line endeavor or physical brick and mortar storefront ?

Anything else you can tell me would help --  please

[QWJLEGEND]

No I don't have ITIN or SSN, but my LLC does have a EIN. File it as C-corp on form 1120 sounds good. 

Based on this link (https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc) " For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and elects to be treated as a corporation. " Does it mean I should file Form 8832 + Form 1120? 

Re. Do you have any business income or just this bank earnings ?

Just bank earnings.

Re. Is this an on-line endeavor or physical brick and mortar storefront ?

It is an on-line endeavor. 

Does turbotax offer any product that handles my case?

[pk · Accepted solution]

@QWJLEGEND , you are correct in that a single member LLC is generally treated as a dis-regarded entity  i.e. for tax purposes it is not separate  from the owner. However as I mentioned for a Non-US person, there is no-person that take over the LLC identity and therefore it must file  a form 8832 to elect to be treated as a self-standing entity -- a C-Corp. 

You will have to file both the forms  ( 8832 and 1120 ) for the  first tax year and thereafter only form 1120 each year .

TurboTax does have  TurboTax Business that caters to C-Corp, S-Corp and Partnerships.   And you can e-file.

Is there more I can do for you ?

pk

[QWJLEGEND]

Awesome, that's all I want to know. Thank you so much for the help!