Llc usa with bank account. Taxes

[offshoretraveler]

Hi

I'm Not a US resident - I have a single member LLC in Florida with an account at the Citibank and works perfect

Now I'm interested to open with them a merchant account in order to charge my American clients with credit card

the question is / will I have to pay taxes for this.??? I do not have operations in the states or office /employees there

thks

 

[Piano]

offshoretraveler said:
Hi

I'm Not a US resident - I have a single member LLC in Florida with an account at the Citibank and works perfect

Now I'm interested to open with them a merchant account in order to charge my American clients with credit card

the question is / will I have to pay taxes for this.??? I do not have operations in the states or office /employees there

thks
Click to expand...

You had to travel to the USA to get that Citibank account ?

 

[offshoretraveler]

Yes - this was some years ago. Was not too difficult - I had other bank references

 

[spacely]

I just randomly bumped into the article online, which states that by being a single-member LLC you simply transfer the funds from the company to your personal account and do not need to pay any taxes. Is this true? Probably applicable to US only

 

[OffshoreDurian]

True with some conditions. For example you can't be a US resident or hire people in the US who work exclusively for you to further your business.

You or your LLC might still be liable to pay taxes in your home country, or in the US if you don't meet all conditions.

 

[spacely]

OffshoreDurian said:
True with some conditions. For example you can't be a US resident or hire people in the US who work exclusively for you to further your business.

You or your LLC might still be liable to pay taxes in your home country, or in the US if you don't meet all conditions.
Click to expand...

hmmm, I thought otherwise because the post seems to be clearly for the US citizens and residents. (it is quite basic, I was googling for the basic stuff)

https://gusto.com/blog/payroll/pay-myself-owner-single-member-llc
and you tell here completely different thing. So I am EU citizen and can have an LLC in the USA and freely transfer the profit from the company to my personal account? Aspect with hiring seems logical but not with being non-US citizen

 

[Tr0nad0r]

This might be useful if you are reading about the basics: Flow-Through Entities: What You Need to Know

US residents pay taxes as individuals for the income they receive from their LLCs, since you aren't a US resident you won't be liable for paying taxes in the US but you still need to pay taxes for the income in your home country.

Last edited: Jun 10, 2021

 

[James2774]

You will not pay any US corporate (LLC are not axed as entities) nor income tax(if you are not a US citizen or resident you are not subject to income tax)
You MAY be liable for sales tax ONLY IF you have nexus in a state, and if so, only to sales made to residents in that state.
No employees/warehouses etc innthe US then you won't pay any taxes.
You will have to pay the yearly state fee for the LLC (it's small) and file a report but that'a nothing.

As far as taxes for your home country? Yes you're liable, or you're not, that's up to you and your dealings and country.

 

[fshore]

You probably will not be able to get merchant processing through citibank, as all us processing requires a US resident in the account.
Taxes shouldn't change, however they would send a 1099-K to irs so you'd be on their radar.

 

[Fulton Abraham Sanchez]

offshoretraveler said:
Hi

I'm Not a US resident - I have a single member LLC in Florida with an account at the Citibank and works perfect

Now I'm interested to open with them a merchant account in order to charge my American clients with credit card

the question is / will I have to pay taxes for this.??? I do not have operations in the states or office /employees there

thks
Click to expand...

Yes, you have to pay taxes if the income is US source. You will need a ITIN number or SSN if you want to open a merchant account.

 

[James2774]

Fulton Abraham Sanchez said:
Yes, you have to pay taxes if the income is US source. You will need a ITIN number or SSN if you want to open a merchant account.
Click to expand...

What taxes? Hes not a resident so not subject to income tax.
LLC is not taxed so no corporate tax.
I think hed only be on the hook for sales tax if he meets certain state thresholds. 200k sales in one state, then hed be liable for sales tax in only sales made to that state. Each state has different limits/thresholds if they have them at all though. Even then its kinda new not sure how much its enforced.

 

[extremedox101]

James2774 said:
What taxes? Hes not a resident so not subject to income tax.
LLC is not taxed so no corporate tax.
I think hed only be on the hook for sales tax if he meets certain state thresholds. 200k sales in one state, then hed be liable for sales tax in only sales made to that state. Each state has different limits/thresholds if they have them at all though. Even then its kinda new not sure how much its enforced.
Click to expand...

thanks ,why Delaware and Wyoming LLC's are recommend as best options for non citizens-residents if all states llcs are equal to foreigner when it's comes to taxes ?

 

[James2774]

extremedox101 said:
thanks ,why Delaware and Wyoming LLC's are recommend as best options for non citizens-residents if all states llcs are equal to foreigner when it's comes to taxes ?
Click to expand...

Well Wyoming can keep you name off of public registers IIRC. Delaware and Wyoming also have zero sales tax. It used to be you didnt pay sales tax on online sales if you didnt have nexus in the state ie no employees, warehouses, etc.
Now they have economic nexus in some states meaning if you have certain threshold of sales you have nexus in that state and pay sales tax. I think that some people confuse Wyoming with anonymous in that no one can find out who you are, when reality is youre never anonymous to the government of course. You can of course be anonymous but whoever is listed as owner of the LLC can be found if they want. Which again doesnt mean they find you.

 

[uplana]

spacely said:
I just randomly bumped into the article online, which states that by being a single-member LLC you simply transfer the funds from the company to your personal account and do not need to pay any taxes. Is this true? Probably applicable to US only
Click to expand...

for sure US citizens only. It won't apply if you live in EU at least so much I know.

It requires some real good tax planning to avoid personal taxes, which is almost impossible.

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[JohnLocke]

You are getting off topic, thread move!

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[James2774]

uplana said:
for sure US citizens only. It won't apply if you live in EU at least so much I know.

It requires some real good tax planning to avoid personal taxes, which is almost impossible.
Click to expand...

Its true in that you transfer the funds to your personal account and dont pay any cooperate taxes as US LLC are not taxed. Its "pass through entity" and you pay taxes on the income you make from it ie yes you transfer funds to your personal account and then pay personal income tax on that. If residing in the USA thats US income tax
Outside the USA you do the same with your US LLC, you transfer your earnings to your home bank, now you wont pay income tax to the USA as you are not a resident, you will of course be declaring that as personal income to your home country.
The sales tax/economic nexus was already covered and you are supposed to pay that as well if you qualify for it.
Im sure people have set ups to be able to spend that money, buy assets, withdraw cash in order to avoid needing to transfer the entire amount to their personal bank and declare personal income.

 

[uplana]

James2774 said:
Its true in that you transfer the funds to your personal account and dont pay any cooperate taxes as US LLC are not taxed. Its "pass through entity"
Click to expand...

you need to distinct personal and cooperate tax!

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[Fulton Abraham Sanchez]

James2774 said:
What taxes? Hes not a resident so not subject to income tax.
LLC is not taxed so no corporate tax.
I think hed only be on the hook for sales tax if he meets certain state thresholds. 200k sales in one state, then hed be liable for sales tax in only sales made to that state. Each state has different limits/thresholds if they have them at all though. Even then its kinda new not sure how much its enforced.
Click to expand...

Remember, if the income is US source, it is taxable even though the SMLLC owner is foreign citizen. The party paying to the SMLLC will file a form with the IRS for the amount paid.

 

[Fulton Abraham Sanchez]

Tr0nad0r said:
This might be useful if you are reading about the basics: Flow-Through Entities: What You Need to Know

US residents pay taxes as individuals for the income they receive from their LLCs, since you aren't a US resident you won't be liable for paying taxes in the US but you still need to pay taxes for the income in your home country.
Click to expand...

If the income that the SMLLC is US source, the owner of the SMLLC will pay taxes and s/he will need to apply for a ITIN o tax number and file taxes. When the SMLLC owner received the payment, the payor will notify the IRS filing a form.

 

[fshore]

Fulton Abraham Sanchez said:
Remember, if the income is US source, it is taxable even though the SMLLC owner is foreign citizen. The party paying to the SMLLC will file a form with the IRS for the amount paid.
Click to expand...

Not necessarily, only if you have etbus.
Also, the definition of US source might not be what you expect. For example if you make your own products it's where they are produced (not where the customers are).