US Income Tax Reporting Requirements for Foreign Businesses

US Income Tax Reporting Requirements

In US, both citizens and Green Card holders need to pay taxes on their income from both domestic and foreign income. This is same when you own a business entity in another country. Still you have to report your income from worldwide income. Below are some of the tax reporting requirements for foreign businesses which you have to know when reporting your US income tax.

To understand your US income tax reporting requirements and to file your US tax return it is also recommended to contact a professional accountant in US as they are with better knowledge and experience. Sometimes, DIY tax filing may end up with issues.With a US accountant you will understand the tax requirements and they will help you to file your tax without any issue.

Accounting Tips for Entrepreneurs

 Foreign Corporations

If your ownership is with a foreign corporation then it is necessary to file Form 5471 together with your tax return. This is applicable for any US person who directly or indirectly owns more than 10% in any foreign corporation. There are more requirements fall under this category which you can get more details from any American accountant.

 Foreign Limited Liability Companies

Foreign Limited Liability Companies are another popular entity which any US person who is with ownership need to file tax according to the requirements. It can be considered as ‘Disregarded’ with one time Form 8832 filing. However it is necessary to file Form 8858 annually. With an Online accountant you can easily workout your tax even if you are in another country where your Foreign Limited Liability Company is in operation.

Foreign Partnerships

Foreign Partnerships are another form of entity in US which you are entitled to file your tax when you have ownership. If you as a US taxpayer holds 50% or greater controlling interest then you have to use Form 8865 when you file your individual tax return. To file this form you need to include a profit and loss statement and other documents that are necessary. This is why most taxpayers like to hire a US accountant to guide them as this tax filing sounds complex.

Above are the most popular types of foreign businesses own by US taxpayers. Other than above Foreign Trusts and FBAR are other forms of foreign business entities available which you should know how to file your tax return. It is always easy to file your tax when you hire a US accountant. You don’t have to worry about meeting your US accountant physically. Simply   you can hire an online accountant.

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