Many non-resident founders are told their U.S. LLC “does not pay tax”, and for income not connected to a U.S. trade or business that is often true. What they are not told is that a foreign-owned single-member LLC still files with the IRS every year.
Who has to file
A U.S. single-member LLC that is wholly owned by a foreign person, and therefore treated as a disregarded entity, must file Form 5472 together with a pro forma Form 1120 for every year it has “reportable transactions” with its owner. Putting money into the company, or taking it out, counts.
When it is due
For a calendar-year company, the return is due on April 15. Filing Form 7004 by that date extends it by six months.
The penalty
The penalty for failing to file, or filing an incomplete form, starts at $25,000 per form per year. It applies even when the company owes no tax at all — which is exactly why it catches people.
Records to keep through the year
- Every transfer between you and the LLC, with dates and amounts.
- Payments the LLC makes on your behalf, and vice versa.
- Your EIN letter and formation documents.
Set the reminder now. Our FilingGuard service tracks this deadline, and every other one your company has, so it never arrives as a surprise.
This post is general information, not legal or tax advice. Rules change; confirm your own situation with a qualified professional before you file.
