As the year ends, foreign founders with U.S.-registered companies need to start preparing for tax season. Whether you own a single-member LLC or a C-Corporation, there are a few key U.S. tax filings and requirements you’ll need to complete every year to stay compliant.
This checklist covers the year-end steps every foreign-owned U.S. business should take to stay in good standing with both the IRS and the state where the business was formed. It also outlines how Bookmate helps you handle your U.S. federal tax obligations from anywhere in the world.
Step 1: Identify Your Business Structure
Understanding your business structure is the foundation of your tax responsibilities. Most U.S. entities formed by foreign individuals fall into one of three categories: single-member LLCs, multi-member LLCs, or C-Corporations. Each of these has its own filing rules.
To find out which one you have, start by reviewing your formation documents and your EIN confirmation letter from the IRS. If your company has just one owner, and you haven’t filed a special election to be taxed as a corporation, you’re likely operating a single-member LLC. These are treated as "disregarded entities" for tax purposes, meaning the IRS sees you and your business as the same entity for income tax reporting, though filings are still required.
If your business has more than one owner—such as a business partner, investor, or co-founder—then it is considered a multi-member LLC by default. These are taxed as partnerships, and you will need to file a partnership return each year.
A C-Corporation is a separate legal and tax entity. It’s always required to file a corporate tax return (Form 1120) and maintain its own accounting and compliance.
If you’re unsure which one applies to you, Bookmate can review your registration paperwork during a consultation and let you know.
Step 2: Gather Financial and Ownership Information
This step is crucial and should ideally begin in the last quarter of the year. The IRS and your state both expect an accurate picture of your business’s financial activity—so collecting this information early gives you time to prepare thoroughly.
You’ll need to gather details on:
- Total revenue earned during the year, even if minimal or just a few clients
- Business expenses, including services, contractors, subscriptions, and tools
- Owner contributions (any money you personally added to the business)
- Owner distributions (any funds you transferred to yourself from the business account)
- Ownership details, including the names, addresses, and ownership percentages of all members or shareholders
If you used an accounting platform like QuickBooks, this data might already be organized. If not, download all of your business bank account statements and payment processor summaries (like Stripe or PayPal). Use this to manually track how money came in and out of your business. For every transaction, note what it was for and how it ties to your business activity.
Multi-member LLCs will need to accurately assign ownership percentages and profit/loss distributions so that the IRS can see who earned what. C-Corps don’t report earnings to individual owners unless dividends were paid.
Keeping this information well-organized ensures that the forms we prepare (such as 5472, 1065, or 1120) are accurate and defensible in case of an IRS question later.
Step 3: Understand Federal Tax Filing Requirements
Every U.S. company—whether active or dormant—must file tax forms annually. The type of form depends on your entity type:
- A single-member LLC owned by a non-U.S. person must file Form 5472 along with a pro forma 1120. This form discloses ownership and any transactions (like capital contributions or withdrawals) between you and the business.
- A multi-member LLC files Form 1065, which is a partnership return. This return reports business income and expenses and issues Schedule K-1s to each member, detailing their share of the company’s profits or losses. If any member is a non-U.S. person and received U.S.-source income, they may also need to file Form 1040-NR.
- A C-Corporation files Form 1120 to report its corporate income and expenses. If the corporation is 25% or more foreign-owned, it must also file Form 5472.
Filing deadlines are:
- March 15 for Form 1065 (multi-member LLCs)
- April 15 for Forms 1120 and 5472
If you can’t complete your return by the deadline, you can file Form 7004 to request a 6-month extension. However, this only extends your filing deadline—not your payment deadline. If any tax is owed, it must still be paid by the original due date to avoid penalties and interest.
Penalties for missing Form 5472 are especially steep—$25,000 per year per form—so it’s crucial to meet your deadline even if your business had no activity.
Step 4: Know Your State Obligations
Your U.S. business is also subject to state-level filings and fees. Even if you didn’t earn income in the U.S., you still must meet your state’s compliance requirements.
Most foreign founders form companies in either Delaware or Wyoming due to their favorable regulations:
- Delaware LLCs must pay a $300 flat annual franchise tax by June 1.
- Delaware C-Corps must file an annual report and pay franchise tax by March 1. The tax varies based on your number of authorized shares and can range from $175 to thousands of dollars.
- Wyoming LLCs and C-Corps must file an annual report and pay a license tax each year based on assets held in Wyoming. The minimum fee is $60, and it’s due on the anniversary of your company’s formation.
Missing these deadlines can result in your company falling out of good standing or even being administratively dissolved by the state, which could block you from opening or maintaining bank accounts, Stripe, PayPal, and other business tools.
Start planning for these filings as early as January each year. Even if you use a registered agent or formation service like Doola or Firstbase, you are ultimately responsible for ensuring these filings are completed.
Step 5: Reconcile Banking and Payment Platforms
Why is this step so important? Because payment platforms and bank accounts are where your actual financial activity lives. And for foreign-owned businesses, the IRS places extra scrutiny on money that moves between the company and its foreign owner(s).
Take time to log in to any platform you’ve used—such as Stripe, PayPal, Mercury, or Brex—and download year-end summaries or transaction reports. Review these alongside your business bank statements to:
- Confirm total income received
- Track expenses paid
- Verify any payments made to yourself or other owners
For LLCs, these payments are usually classified as owner draws or capital distributions. For C-Corps, unless you’re on a U.S. payroll, there shouldn’t be any payments made to you personally.
This data feeds directly into your tax forms. Reconciling it now helps prevent errors and gives your tax preparer the clean records they need to file accurately.
Step 6: Work with Bookmate for Federal Filings
Bookmate has helped hundreds of international founders manage their U.S. tax filings. Whether you’re dealing with Form 5472 for a single-member LLC or a complex C-Corp return, our team handles it all for you remotely.
Here’s how the process works:
- We start with a free consultation over Zoom, where we learn about your business, ownership, and financial history.
- Then we send you an engagement letter and invoice to begin work.
- You’ll complete a secure online form to share your financial details, ownership structure, and supporting documents.
- We prepare and review all necessary tax forms—1120, 5472, 1065, and others—based on your structure and situation.
- Finally, we submit the return by mail, e-file, or fax, depending on the IRS’s requirements. If the IRS contacts you about your return, we help you respond to those notices.
All of this is done remotely. There’s no need to handle any physical paperwork or understand U.S. tax code yourself. We make it simple.
Final Thoughts
U.S. tax compliance for foreign-owned businesses doesn’t have to be overwhelming. By understanding your company’s structure, tracking your financial activity, and planning your state and federal filings early, you can avoid penalties and stay in good standing.
Bookmate is here to support you every step of the way—from entity classification to final IRS submissions.
Book a free consultation or visit trybookmate.co to get started.
