Business Taxation


Every USA citizen or Green Card Holder who owns a business outside the United States of America, he may have separate filing requirements to go along with the filing of his personal USA Tax Returns. Certain USA individuals who own more than 10% ownership in a foreign corporation must include additional filing of Form 5471 (and related forms) to report financial position of the company, which in fact can be lengthy and sometimes, confusing.

If the USA person is a partner in a foreign partnership, then the requirement is to file Form 8865 to report income and financial position of the partnership. There are various material penalties associated with non-filing / reporting of the business with the tax returns and hence it is important to fully understand and report the required documents on a timely basis annually.

If you own a business but you are working for yourself, there are different set of requirements. You must file Schedule C (Profit or Loss from Business) with your USA Personal Tax Return to report income and expenses earned from yourself employment business. It is to note that the filing threshold for the self-employed individuals is low and if you are earning $400 or more in a tax year, you are required to file a US tax return.

Business bookkeeping Requirements:
Whether you are running a company or a self-employed individual running a small business, record keeping of all the business transactions such as income and expenses and receipts of the business are critical for reporting purposes. Accurate record keeping makes it simpler to prepare your tax returns and calculate taxes due, if any, and are used as supporting documents in case of any queries from the IRS.

TAX FORMS You need to File
We all know that every business is not the same. There are specific tax forms that you need to fill out depending on the type of business that you have.

Sole proprietorship

  • when we say sole proprietorship, this type of business means that you’re self-employed without the limited liability coverage. Digital workers fall under this category, as well as freelance workers and consultants. Schedule C on Form 1040 is the tax form that you need to fill out.

Corporation / PLC

  • if a USA person has more than 10% of a foreign corporationor PLC, then the tax form that should be used and filed is Form 5471.

Partnership / Limited Liability Company
if a USA person is a partner in a foreign partnership or a Limited Liability Company, then the tax form that should be used and filed is Form 8865.

Filing deadlines for business owners
The filing deadline for USA persons with businesses abroad is the same as filing of their personal US tax returns. Business forms are supplemental forms submitted along with personal tax returns.

If you can handle your tax returns and want to consult with tax experts of Capital Round or want to completely outsource your tax returns and related work call now or send an email to Capital Round for immediate response and peace of mind.

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