Annual Tax Filing

What a US LLC owes every year, even with no income

This is the part founders outside the US are most often surprised by. A US LLC that earned nothing, has no customers and never moved a dollar still has federal filings due. Missing them is not a late fee — the penalty for one of these forms starts at $25,000.

What you owe depends on how many owners the LLC has.

One owner, no US-source income

A foreign-owned single-member LLC is a “disregarded entity” for income tax, but it is still a reporting entity. It files Form 5472 attached to a pro forma Form 1120 — a near-blank corporate return whose only job is to carry the 5472. You report transactions between you and your own company: the money you put in, the money you took out, formation costs you paid personally.

The penalty for not filing is $25,000, and, if the failure continues more than 90 days after an IRS notice, a further $25,000 for each related party, for each 30-day period (or part of one) that it continues. There is no “we made no money” exemption. If you need more time, Form 7004 buys an extension, but it must be filed by the original due date.

Two or more owners

A multi-member LLC is taxed as a partnership and files Form 1065 with a Schedule K-1 for each owner. The deadline is earlier than most people expect — 15 March, not April. If the LLC has income effectively connected to a US trade or business, it also has withholding obligations on the foreign partners’ share under section 1446.

State filings are separate, and they do not follow the federal calendar

Your state wants its own report on its own schedule, and this is where most dissolutions happen. Two examples we file constantly:

• Wyoming — an annual report with a license tax of $60 minimum, or $0.0002 per dollar of assets located in Wyoming, whichever is greater. Due the first day of your anniversary month. Miss it by 60 days and the state administratively dissolves the company. You can file up to 120 days early.
• Delaware — no annual report for LLCs, but a flat $400 annual tax due 1 June every year. This catches people out because Delaware’s better-known $400 figure is the corporation franchise tax minimum, which is a different tax on a different entity.

What we file for you

• Form 5472 with the pro forma Form 1120, for single-member LLCs
• Form 1065 and Schedule K-1s, for multi-member LLCs
• Form 7004 extensions where the deadline is tight
• Your state’s annual report or franchise tax, filed and paid on time
• A reconstruction of your reportable transactions for the year, if you have not been keeping them
• A written summary of what was filed and what is due next year, with dates

What we need from you

• Your EIN letter (IRS Form CP 575, or the 147C replacement)
• Your formation documents and the state you filed in
• Bank statements for the tax year, or a summary of money in and out
• A list of amounts you personally paid into or took out of the company
• Your prior year’s filing, if this is not your first year

If your records are incomplete, say so at the start. Reconstructing a year is normal work and it is far cheaper than an amended return.

Timing

For a calendar-year LLC, the Form 5472 / 1120 package is due 15 April, extendable to 15 October with Form 7004. Form 1065 is due 15 March, extendable to 15 September. We ask for documents at least three weeks before the deadline; inside that window we can usually still file an extension, which is not the same as filing the return.

Who this is not for

• Anyone wanting to be told they owe nothing. If you have a US LLC, you have filings. We will tell you which ones, not whether you can skip them.
• Companies with US employees or a US office. That is payroll, nexus and state income tax — a bigger engagement than this service, and we will say so rather than underquote it.
• Anyone needing personal US tax returns. A Form 1040-NR is a separate filing from your company’s.

Questions

My LLC made no money. Do I still have to file?

Yes. Form 5472 reports transactions between you and the company, not profit. Formation fees you paid personally are themselves a reportable transaction, so a first-year LLC with zero revenue almost always has something to report.

What happens if I have not filed for two or three years?

You file the missing years. The $25,000 penalty is assessed per year per form, but it is not automatic on filing late, and reasonable-cause relief exists. The worst option is continuing not to file — and there is more on what actually happens when Form 5472 was never filed, and how to catch up. Tell us how many years are open and we will quote it honestly.

Does an LLC pay US income tax?

A single-member LLC with no US-source effectively connected income generally has no US federal income tax liability — but the reporting obligation is separate from the tax obligation, and it is the reporting that carries the $25,000 penalty.

Do I need an ITIN to file?

Not for Form 5472 — a single-member LLC files under the company’s EIN. You may need one for a personal return or to claim a treaty benefit. See our ITIN service.

Do you file state and federal together?

They are separate filings on separate deadlines, and we handle both. State annual reports are the more common cause of a company being dissolved, because they are easy to forget.

What does it cost?

It depends on whether the LLC has one owner or several, and on whether your state annual report is bundled in. Tell us the state, the number of owners and the years outstanding and we will quote it before any work starts — the consultation is free and carries no obligation.