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How does a Non US Resident Pay Taxes?

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Category : > Repro America | Representation in US
Posted On : Wed May 08th,2019

It is important to understand the USA business tax structure prior to register an entity in the USA. The Repro America is committed to connecting you with the America professionally and crawling with you at every step to make you successful.

Every person whether a resident or a non resident is required to pay taxes on the earned and unearned income in the USA.


How does a Non US Resident file taxes for a corporation?

A Non US resident withdraws a salary to wipe off the profit in the company. An ITIN (Individual Taxpayer Identification Number) is obtained from the Internal Revenue Service to pull out the salary from a US corporation.

Generally, an ITIN is applied end of the year with the income tax returns, but for the payroll purpose a bank letter is attached with the IRS Form W-7 to apply for an ITIN. A Non US resident is exempted to contribute FICA, which is a combination of social security and Medicare. A Non US person pays only Federal, State, and city taxes if applicable.

Any leftover profit in the corporation is taken away as a dividend and report on the Income Tax form 1040NR along with the wages. The dividend is not recommended because, it lets pay a person's tax twice on the same income.


"Transferring money over $10,000.00 to overseas must be reported to the IRS to avoid penalty and prison"


How does a Non US Resident file taxes for a limited liability company?

A limited liability company (LLC) is a pass through entity where a taxpayer pay taxes on the personal level. An LLC has the following tax characteristics.

  1. A member of an LLC is not allowed to withdraw payroll, instead an owner of the company is forced by the taxation department to pull out as a profit and report on the income tax.
  2. A member of an LLC has an option to file an election with the IRS to treat it as a corporation to withdraw salary from an LLC.
  3. A Non US resident files a form 1040NR to report income incurred by the business.

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