When I first formed my U.S. LLC from outside the country, I thought taxes would be simple since I wasn’t living in the States. But soon I realized, things weren’t as straightforward. I kept hearing about Form 5472, BOI, state tax deadlines… and I started worrying I might’ve already missed something important.
So, I am asking: What are the most common tax mistakes non-resident founders like me should avoid?
You’re asking a really important question here. And trust us, many non-resident founders miss the fine print simply because the U.S. system wasn’t built with them in mind. Here are the top mistakes we see non-residents make when it comes to filing U.S. taxes:
Skipping Form 5472 (with Form 1120)
If you\’re the sole owner of a U.S. LLC and not a U.S. person, you\’re required to file Form 5472 + a pro forma 1120; even if your LLC made no money. Missing it? That’s a $25,000 penalty waiting to happen.
Confusing LLC structure with C Corporation rules
Many assume all U.S. companies file taxes the same way. Not true. LLCs (especially single-member ones) follow different tax filing rules than C Corps. Filing the wrong form can delay or even flag your compliance.
Not getting an ITIN when required
If you\’re receiving U.S. income personally (like from a single-member LLC that\’s disregarded), you might need an ITIN to file properly. Many miss this step, which leads to rejected filings or withheld payments.
Ignoring state-level obligations
People think filing federal taxes is enough. But some states (like California or Delaware) have separate franchise taxes or annual reports. If you forget state-level filings, you risk penalties or even involuntary dissolution.
Assuming \’no income\’ means \’no filing\’
Even if your LLC earned zero dollars, you may still need to file to remain compliant. The IRS isn’t lenient just because your business had a quiet year.
Relying too heavily on AI or outdated blogs
Tax rules change. And while Google gives you a head start, every case is unique, especially for non-residents dealing with cross-border rules, double taxation, and foreign reporting.
Quick Tip from Business Globalizer:
As IRS Certified Acceptance Agents (CAA), we help you not just get your ITIN, but also structure your filings the right way. We’ve seen firsthand how a little guidance can save you thousands, or worse, the risk of losing your good standing.
