US Tax & Accounting — Federal CIT, State Tax & Sales Tax Nexus

A single-member LLC owned by a non-US person is a disregarded entity for US federal income tax: it pays no US tax on foreign-sourced income itself. But there's a trap. The LLC still files Form 5472 (Information Return of a 25% Foreign-Owned US Corporation) and a pro-forma Form 1120 with the IRS every year. Missing Form 5472 costs a $25,000 penalty per year — one of the most commonly missed obligations for foreign-owned LLCs.

Form 5472 is filed by any US LLC that is 25%+ foreign-owned and enters a "reportable transaction" with a related foreign party — capital contributions, loans, management fees. The form attaches to a pro-forma Form 1120. Deadline: March 15 for C-Corps, April 15 for LLCs (extendable to September). The $25,000 penalty applies even at zero tax owed — this is pure information reporting.

The US federal corporate tax rate is 21%, flat since the Tax Cuts and Jobs Act 2017. Deductions: ordinary and necessary business expenses, depreciation (Section 179 immediate expensing up to $2,500,000 for tax years beginning in 2025, or MACRS), research and development credits (Section 41), net operating loss (NOL) carryforwards (80% of taxable income), and the qualified business income (QBI) deduction for pass-through entities. State corporate taxes vary. Delaware, Nevada, and Wyoming charge nothing on non-operating entities.

Yes. A US C-Corp paying dividends to non-US shareholders withholds 30% federal tax at source — unless a tax treaty lowers the rate. Common treaty rates: UK 15%, Germany 15%, Canada 15%, Netherlands 5%/15%, China 10%. The withholding is reported on Form 1042. For the reduced rate, the non-US shareholder files Form W-8BEN. There is no withholding on LLC distributions to non-US members from foreign-source income.

A Delaware LLC that does not operate in Delaware pays no state income tax — only the $400 annual Delaware tax. But employees, physical presence, or sales in another state create nexus and tax obligations there. California charges any LLC doing business in the state a minimum $800/year plus a gross receipts tax. A fully remote Delaware LLC with no US nexus typically owes no income tax to any other state.