Learn US Systems

US taxation

The entity you form and the tax return you file are related, and they are not the same choice. This is orientation, not advice for your facts.

LLC

A single-member LLC is usually disregarded for federal income tax. If the owner is a non-US person, Form 5472 with a pro-forma 1120 is often still required, including when revenue is zero. The IRS penalty for missing Form 5472 starts at $25,000. A multi-member LLC usually files Form 1065 and issues K-1s.

C-Corp

A C-Corp is its own taxpayer and files Form 1120. That is the structure US venture investors usually expect. An S-Corp election is not available when a shareholder is not a US person.

State tax is separate

Delaware’s annual LLC tax and Texas franchise tax are not federal income tax. They live on the compliance calendar.