“What documents do I have to file for my LLC” is one of the questions that we get asked the most. This article will focus on and discuss the yearly filing requirements for a single member, foreign-owned LLCs. Each state and the Internal Revenue Service, or commonly known as the IRS, has specific filing requirements for every type of business such as partnerships, corporations, limited liability companies (LLCs), and others. To avoid tax-related and legal problems, it is important to adhere to state compliance and IRS code when it comes to business classifications and requirements.

To discuss things in order, we will divide the filing requirements into two categories: (1) filings for the state and (2) filings for the IRS.

• Annual Report
• How to File
• What happens when you do not file?
• Franchise Tax
• What happens if I do not pay franchise tax?
• Sales Tax
• IRS Compliance
• Form 5472 and 1120
• When to File Form 5472 and 1120
• Where to File Form 5472 and 1120
• What happens if you fail to file Form 5472 and 1120?
• FBAR
• When to file FBAR
• How to file FBAR
• Penalties
• Form 1040-NR
• When and Where to File Form 1040-NR
• Penalties
• Summary
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siding in the state of organization.

If such a person can not be found, then the services of a professional registered agent must be obtained. The fees for this are usually in the range of 100$ to 250$, depending on the state and service provider. The fee is due once a year, usually around the anniversary of the LLC.

You can change your registered agent if you wish to. The recommended time for changing a registered agent is around four weeks before the anniversary of your company. The usual time of process for changing a registered agent is 1 to 14 days, depending on the state.

Annual Report

Requirements for filing an annual report vary widely from state to state. Here’s a guide for you.

First, determine if you need to file an annual report or not. Some states do not require an annual report, but most of them do. You can check this by looking up on the internet whether your state requires one or not. The annual report comprises updates to contact information, registered agent, members, or other things that the state might ask you to include.

Second, find out the due date of the annual report in your state. This could be found on the business filing website of your state. Some states require a report annually, others have a biennial filing, and some are even every 10 years. The due date depends on your state. Some states have a single due date for all reports, while in other states, the due date is on the anniversary of your LLC.

Third, complete the annual report form. The ways on how to complete the form vary per state. Most states allow you to fill out your annual report electronically through the state business filing agency website.

Franchise Tax

Some states require you to pay a franchise tax. The most known states for this is Delaware and California. The amount of franchise tax varies per state. But here is what we know,  Delaware Franchise Tax costs $300 per year and the due date is June 1st of each year. On the other hand, California requires LLCs to pay $800 per year for franchise tax.

Sales Tax

Sales tax is levied by states or counties on business transactions. The state and local government requires not just LLCs but also other businesses to collect sales tax from customers and give the payment to the significant government agencies. To avoid penalties and legal problems, it is important that your business collects the correct sales tax rate from customers.

To calculate the correct rate for sales tax, the sales you need to consider are:

• Store Sales
• In-State Sales
• Out-of-State Sales

IRS Compliance

After the state requirements for LLCs, you also need to comply with the IRS guidelines to be able to continue operating and to avoid legal issues. The three primary filing requirements for a single member, foreign-owned LLCs are:

• Form 5472 and 1120
• FBAR
• Form 1040-NR

For a detailed discussion of every requirement, continue reading.

Form 5472 and 1120

Every foreign-owned US LLC is subject to an annual IRS information return. The information in the forms is regarding the reportable transactions of foreign LLC during the tax year.

This additional compliance procedure was introduced in 2017, in accordance with Sections 6038A and 6038C. The purpose of this is to give the IRS more information over who owns US LLCs, and what they are using the LLC for.

Take note that Form 1120 should now be attached to Form 5472 upon filing in accordance with the new regulations of Section 6038A.

If you want to learn more about Form 5472, you can read our Ultimate Guide to Form 5472 for Disregarded Entities.

FBAR

Report of Foreign Bank and Financial Accounts or known as FBAR is only relevant for

• companies who own non-US bank accounts
• companies who have held more than $10,000 USD equivalent at one time in a foreign account during the reporting tax year.

FBAR is in compliance with Title 31 of the US Code.

Form 1040-NR

Form 1040-NR or U.S. Nonresident Alien Income Tax Return is only necessary in the following cases:

• you are a nonresident alien engaged in trade or business in the United States
• were there is US source income, on which the required tax obligations have not been satisfied by withholding.

Summary

To sum everything up, if you are a non-resident in the US owning a single-member LLC, you must comply with state and IRS requirements which are the following:

State requirements:

• Maintain a registered agent
• File annual report
• Pay franchise tax
• Pay sales tax

The due dates vary in each state, so make sure to check it on your state’s website.

IRS requirements:

• Form 5472 and 1120
• FBAR
• Form 1040-NR

The deadline for filing the mentioned requirements are every 15th of April after the tax year to be reported. Failure to do so has penalties and consequences.

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