LLC taxes for foreigner

[Sasa]

Hi, 

I am a foreigner and I have a multiple member LLC. I don't have anything to report on my tax return this year, except the LLC. Do I need to file a tax return anyway? 

Thank you in advance. 

[LudwigVan_fan]

You don't specify whether the LLC is located in the U.S.  Since you're asking the question, I'm assuming it is.  A multi-member LLC files a U.S. Form 1065, unless it elected to be taxed as a corporation.  There are special rules for both partnerships and corporations with foreign partners or shareholders.  There are two many unknowns for me to give a direct answer.  However, here are two links to the IRS web page and you should be able to follow from there. 

Link #1

https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens

Link #2

https://www.irs.gov/individuals/international-taxpayers/helpful-hints-for-partnerships-with-foreign-...

Are Your Foreign Partners Aware of This?

This is especially important with respect to partnership withholding. A foreign or domestic partnership that has effectively connected taxable income allocable to a foreign partner must pay a withholding tax under IRC section 1446 equal to the applicable percentage of the effectively connected taxable income that is allocable to its foreign partners. A partnership must pay the withholding tax for a foreign partner even if the partnership does not have a U.S. TIN for that partner.

Foreign partners must attach Form 8805 to their U.S. income tax returns to claim a credit for their share of the IRC section 1446 tax withheld by the partnership. To insure proper crediting of the withholding tax when reporting to the IRS, a partnership must provide a U.S. taxpayer identification number (TIN) for each foreign partner. The partnership should notify any of its foreign partners without a valid TIN of the necessity of obtaining a U.S. taxpayer identification number. An individual's taxpayer identification number is the individual's social security number (SSN) or individual taxpayer identification number (ITIN). An ITIN will always begin with a 9, and the middle two digits will be in the range of 70 to 80. It is also possible that a partner's TIN could be its U.S. employer identification number (EIN).

NOTE: Certain aliens who cannot obtain SSNs can now apply for ITINs on Form W-7, Application for IRS Individual Taxpayer Identification Number.

Partnerships should review their files and/or contact their foreign partners to verify that each foreign partner has a valid TIN.

References/Related Topics

• Partnership Withholding
• Instructions for Forms 8804, 8805, and 8813
• Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, Section on Partnership Withholding on Effectively Connected Income

[Oz8712]

@LudwigVan_fan could you possibly share the link where I will be able to examine the US taxation for foreign entity (non-US) which allows to form an US LLC? So, I don't want to be owner as an individual in US LLC. I'd prefer if my abroad entity, let say Cayman ltd, to form, let say Wyoming LLC. 

Thanks in advance and your time. 

[LudwigVan_fan]

This is too complicated for me to answer, much of it is beyond my expertise.

If forming an LLC in the U.S. with one owner who is an individual, then you would need to elect to be taxed as a corporation.  Then, you need to be mindful of what happens with foreign shareholders.  That is addressed in my original response.

I think you should consult legal experts in the formation of the U.S. entity and who can also guide you with the taxation rules.  This gets to be complicated.