Non resident alien on LLC/C Corp and taxation on profits

Asked by: Christian  — 21 June, 2013

I have a simple scenario but I don’t know how to proceed. I want to setup an LLC or C Corp in the US, perhaps Nevada or Wyoming. There isn’t going to be work made in the states (I’m in Argentina) as everything is online, but customers will be paying to the company bank account in the US. I may travel during the year and stay a few months, but don’t want any problems (I think a corp is better due to this).

Let’s say I make 9,000 USD monthly. How can I take this money out without doing anything illegal nor upsetting the IRS? Can I just wire the money to my personal bank account? Do I have to withold myself 30% taxes (no tax treaty country) like dividends do? Pay taxes on those 9,000 or everything is exempt? Do I need to get myself an ITIN number with an LCC? I don’t want to do that, I prefer a corp if this is the case.

I’m just trying to maximize my income and keep everything flowing. Thanks!


Answered by: admin  — 21 June, 2013


You can set up a US corporation for your business; however, a corporation is a separate tax entity from its owners. That means the corporation files its own tax return and pays its own tax liability. That also means that you cannot freely transfer money between you the owner and the corporation. The corporation can reimburse you for expenses you pay on behalf of the business and the corporation can pay you for services you provide to the corporation, both of which are tax deductions for the business. The only other option for you to take funds from the business is if the corporation pays you dividends. Dividends are not a tax deduction and are generally taxable income to you the individual.

Certainly a corporation is often a beneficial tax structure for non-US owners to operate a US business, but there are other tax structures for a US business including a sole proprietorship or partnership, but it would require a lot more information about your particular business and individual tax situation to determine what the best structure is for your unique situation.

A US corporation or LLC would likely obtain an EIN. Whether you need to obtain an ITIN will depend on if you have US tax reporting obligations due to your US business interests.

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