US LLC Taxes for Non-Residents: Form 5472 & 1120 (2026)

Last verified: June 15, 2026 · Sources

This is general information, not tax advice — every situation differs; confirm yours with a cross-border accountant. See our terms.

Short answer: A foreign-owned single-member US LLC must file two forms with the IRS every year — Form 5472 plus a pro forma Form 1120 — even if it earned nothing and did nothing. Skipping this carries a $25,000 penalty. Whether you actually owe US income tax is a separate question: you only owe it on income effectively connected to a US trade or business. Many fully-remote, foreign-based founders with no US staff or office owe $0 in US federal income tax — but they still must file the 5472/1120. Filing is mandatory; owing is conditional. Don't confuse the two.

The distinction that confuses everyone

Two different things get blurred together:

1. Filing — submitting required paperwork to the IRS. For a foreign-owned LLC this is not optional and applies regardless of income.
2. Owing — actually paying US income tax. This depends on whether your income is "effectively connected" to a US trade or business.

You can — and many non-residents do — have a $0 tax bill but a mandatory filing. Treating "I owe nothing" as "I file nothing" is the single most expensive mistake in this whole area.

What a single-member foreign-owned LLC must file

For US tax purposes, a single-member LLC is a "disregarded entity" — the IRS looks through it to you, the owner. Since 2017, a US disregarded entity that is foreign-owned is treated as a reporting corporation for one specific purpose and must file:

• Form 5472 — "Information Return of a 25% Foreign-Owned U.S. Corporation." It reports the LLC's "reportable transactions" with you and other related parties (capital you put in, money you take out, loans, etc.).
• A pro forma Form 1120 — the US corporate return, used here only as a cover sheet to carry the 5472. "Pro forma" means you don't complete the whole thing: typically just the name, address, and items B and E on page 1. You write your EIN, mark it foreign-owned, and attach the 5472.

This applies even with no income and no activity, as long as there were reportable transactions — and simply funding the LLC or paying its formation costs usually counts, so in practice you'll file from year one.

Deadline: for calendar-year filers, April 15 (e.g., April 15, 2026 for the 2025 year). You can get an automatic 6-month extension to October 15 by filing Form 7004 by the original due date — and for a disregarded entity you write "Foreign-owned U.S. DE" across the top of the 7004 and use the Form 1120 code.

How to file: these forms cannot be e-filed by a foreign-owned disregarded entity. You must fax or mail them to the IRS in Ogden, Utah — currently by fax to 855-887-7737, or by mail to Internal Revenue Service, 1973 Rulon White Blvd, M/S 6112, Attn: PIN Unit, Ogden, UT 84201. (The IRS occasionally updates these; confirm against the current Form 5472 instructions before sending.)

The $25,000 penalty — why this is the headline

The IRS penalty for failing to file Form 5472 on time, or filing it incomplete/incorrect, is $25,000 — per form, per year. It doesn't stop there: if the failure continues for more than 90 days after the IRS mails you a notice, it can add another $25,000 for each 30-day period after that window, with no stated cap.

This is why "it's just a dormant little LLC" is dangerous thinking. A company that earned $0 can still generate a $25,000 penalty purely for not filing an information return. Calendar this obligation the day you form.

One thing this is not: a FinCEN BOI report. Those are separate from your IRS filings, and as of 2026 US-formed LLCs — including foreign-owned ones — are exempt from BOI reporting. See Do foreign-owned US LLCs have to file a BOI report? →

Do you actually owe US income tax?

Here's the part founders most want to know. The test for a non-resident is whether you have a US trade or business (USTB) generating effectively connected income (ECI). If you do, you pay US federal income tax on that ECI, after deductions, at the same graduated rates US residents pay — and you'd file a personal Form 1040-NR to report it. If you don't, you generally owe no US federal income tax on your business profits.

Whether you have a US trade or business is fact-specific, but as rough orientation:

• Often NOT effectively connected (frequently $0 US income tax): you're a solo founder living abroad, providing services or selling digital products to customers worldwide, with no US employees, no US office, no US-based dependent agent acting for you, and no US inventory. Your work happens outside the US. Many online consultants, SaaS, and freelancers fall here.
• Likely a US trade or business (income tax probably applies): you have US-based employees or a dependent agent concluding deals for you, a US office or fixed place of business, or you hold inventory in the US and sell from it (a classic trigger for e-commerce sellers using US fulfillment).

A separate category is FDAP income — US-source passive income such as certain US dividends, interest, royalties, or rents. That's generally subject to a flat 30% US withholding tax (or a lower rate if your country has a tax treaty), independent of the USTB analysis. Income from foreign customers for your services is not US-source FDAP.

The line between "US trade or business" and "not" is genuinely nuanced, and getting it wrong is costly in both directions (overpaying, or underpaying and facing penalties). This is the one place we strongly recommend a cross-border CPA look at your specific facts — it's cheap insurance relative to the stakes.

Multi-member LLCs are taxed differently

Everything above is for a single-member LLC. If your LLC has two or more owners, the IRS treats it as a partnership: it files Form 1065 and issues Schedule K-1s to the owners, and there can be withholding obligations on income effectively connected and allocable to foreign partners. The 5472 single-member regime doesn't apply the same way. If you're multi-member, get advice tailored to that structure.

Don't forget state and home-country tax

• US state income tax: generally only relevant if you have nexus/operations in a specific state. A typical remote non-resident with a Wyoming/New Mexico LLC and no US presence usually has no state income tax — but the state fee/annual report still applies (see the state guide).
• US sales tax: a separate system from income tax. If you sell physical goods (or certain digital goods) to US customers, you can trigger economic nexus in states once you cross their thresholds. That's its own topic — we'll cover it in a dedicated guide.
• Your home country: a US LLC does not erase tax where you are a tax resident. Your country may tax the LLC's profits as your personal/business income, and some countries may even treat a US LLC in unexpected ways. Plan for home-country tax — it's often the bigger bill.

How to stay compliant without stress

• Calendar the dates the day you form: April 15 (or October 15 with a 7004).
• Keep clean records of money in and out between you and the LLC — that's what Form 5472 reports.
• Budget for filing: DIY is possible, but many non-residents pay a cross-border accountant ~$200–$500/year to prepare the 5472/1120 correctly. Some formation services bundle annual tax filing as an add-on.
• Make sure you actually have your EIN first — the forms need it. (See how to get an EIN without an SSN.)

This tax obligation is Step 7 of the full setup — the complete path is in our pillar guide: How to start a US LLC as a non-resident →.

Sources

• IRS – Instructions for Form 5472 (filing, deadlines, fax/mail, and the $25,000 penalty)
• IRS – Effectively Connected Income (ECI)
• IRS – Taxation of Nonresident Aliens (graduated rates on ECI, 30% FDAP withholding)

Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a qualified professional for advice specific to your situation.