If you run a freelance business through a U.S. company but live abroad, you may be asking whether you need to file Form 5472 with the IRS. The answer doesn’t depend on whether you provide design services, programming, copywriting, or consulting. It depends on the type of entity you formed.
If your freelance business is a foreign-owned single-member LLC or a corporation with at least 25% foreign ownership, then yes, you must file Form 5472. If your business is a multi-member LLC taxed as a partnership, Form 5472 usually does not apply.
This guide explains what Form 5472 is, how to check your entity classification, what transactions are reportable, and why even freelancers with no clients must file. We’ll also cover a practical example and explain how Bookmate helps.
What is Form 5472?
Form 5472 is an IRS information return that reports certain transactions between your U.S. company and its foreign owners. It is not a tax return that calculates your income tax, but the IRS requires it so they can track money moving across borders. If your freelance business is foreign-owned and structured as a single-member LLC or corporation, you almost certainly need to file.
For freelancers, common reportable transactions include wiring money into the company from abroad to cover software, marketing, or subscriptions, as well as reimbursing yourself for expenses. Even if you had no clients and no revenue, these owner-related transactions still require reporting.
Who must file Form 5472?
The requirement depends on entity type:
- A foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120.
- A U.S. corporation with 25% or more foreign ownership must file Form 5472 with the full Form 1120.
- A multi-member LLC taxed as a partnership files Form 1065 instead, not Form 5472.
How to know what type of company you have
If you worked with a formation company, you may not know your classification. Here’s how to check:
- If you formed an LLC with one owner and never filed a special election, you almost certainly have a single-member LLC. Your EIN confirmation letter may show your name with “Sole Mbr,” or it may describe the entity as a “disregarded entity.”
- If you formed an LLC with multiple owners, you probably have a multi-member LLC. Your EIN letter may list the applicant’s name with “Mbr,” which signals multiple owners. These entities file Form 1065.
- If you formed a corporation (for example, a Delaware C-Corp), you are required to file Form 1120 every year. If at least 25% is foreign-owned, you must also file Form 5472.
- If you or your advisor filed Form 8832 or 2553 to elect a different tax treatment, that election controls how your entity is classified.
What information goes on Form 5472?
The form requires details about your company, its owners, and transactions between them. For freelancers, this usually includes capital contributions from you to pay for software, laptops, or subscriptions, and reimbursements from the company back to you. Even without revenue, these are reportable and require disclosure.
When is Form 5472 due?
Form 5472 is due at the same time as corporate returns. For calendar-year companies, the deadline is April 15, with an extension until October 15 available by filing Form 7004. The form is never filed on its own—it must be attached to either a pro forma Form 1120 (for single-member LLCs) or a full Form 1120 (for corporations).
Missing the deadline can be very costly. The IRS penalty is $25,000 per year for a missing or late Form 5472. Additional $25,000 penalties can be added if you ignore IRS notices. These apply even if your freelance business had no clients and no income.
Common questions freelancers ask
Does the type of freelance service matter? No. Whether you write code, design graphics, or consult on business strategy, the IRS only looks at entity type and ownership.
Do I need to file if I had no clients? Yes. If you funded the business, paid expenses, or reimbursed yourself, those are reportable transactions.
What if I missed a filing? Bookmate does not usually prepare past years’ filings, but we can guide you on how to approach resolving them.
Staying ahead of filing
The best way to avoid trouble is to track all money transfers between you and your company. For freelancers, this often includes payments for subscriptions, software, or contractor support. Keeping clear records ensures nothing is missed when preparing Form 5472. Filing early ensures you meet the deadline and avoid penalties.
Example for a freelance business
A founder in Nigeria forms a Delaware single-member LLC to provide freelance graphic design services. In the first year, there are no client contracts, but she wires $6,000 into the company’s account to cover design software and marketing. Even without revenue, the $6,000 contribution is a reportable transaction.
She must file Form 5472 with a pro forma 1120. Filing avoids the $25,000 penalty and keeps the company compliant.
How Bookmate helps freelancers
Bookmate specializes in U.S. federal filings for foreign-owned businesses. For freelance businesses, we:
- Prepare and file Form 5472 with the pro forma 1120 for single-member LLCs.
- Prepare and file Form 1120 with Form 5472 attached for corporations with foreign shareholders.
- File from within the U.S., ensuring the IRS accepts them on time.
- Provide guidance on how to handle past filings if you missed them.
We don’t apply for EINs or ITINs directly, but we partner with theitin.com for ITINs and recommend formation companies for EIN support. Our focus is keeping your federal filings correct, complete, and penalty-free.
Final thoughts
Running a freelance business through a U.S. entity as a foreign founder is common, but compliance with IRS requirements is critical. The IRS does not care what kind of service you provide—it only cares about your company structure.
If you are a foreign owner of a single-member LLC or a corporation, Form 5472 is almost always required. Even without clients, you must file if there were owner-related transactions.
Bookmate helps freelancers worldwide file accurately and avoid penalties, so you can focus on your craft instead of IRS forms.
Learn more at trybookmate.co or book a consultation today.
