Of course, certain rules apply to avoid LLC taxes.Įffectively, foreigners are only subject to US tax if they are “engaged in a trade or business in the United States” (ETOB). A US LLC opened by a non-US citizen or nonresident can arguably allow for earnings that are not taxed in the US. Tax-free LLC income for foreign owners of a US LLCĪ little known fact is that the US can be one of the biggest tax havens in the world. Instead, the profits and losses of the business pass through to its owners, who report them on their personal tax returns. What this means is that the LLC is not taxed directly.
Even for US taxpayers, LLC taxes can be favorable.Īn LLC is a pass-through tax entity. Updated Jan 15, 2020, by John Hamilton, CPAĪ US-based LLC can have great tax advantages, especially for foreign entrepreneurs abroad.
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