As the end of the year approaches, foreign founders with U.S.-registered companies—especially those based in India—need to start preparing for tax season. Whether you run a single-member LLC or a C-Corporation, there are key federal and state filings that must be completed each year to stay compliant and avoid costly penalties.
This guide walks you through the major year-end requirements for foreign-owned U.S. LLCs and C-Corps. It explains how to identify your business structure, collect the right financial records, understand what forms you need to file, and how Bookmate can make this process straightforward and fully remote.
Step 1: Confirm Your Business Structure
Before diving into tax preparation, you must understand how the IRS views your business. This determines everything about how you file your taxes and maintain compliance.
If your LLC has only one owner and you haven’t filed anything to elect corporate treatment, it’s automatically classified as a single-member LLC, which the IRS treats as a “disregarded entity.” You’re still required to file specific forms (like Form 5472), but the company itself isn’t taxed separately from you.
If your LLC has more than one owner—such as you and a partner—it is by default classified as a multi-member LLC. This is taxed as a partnership unless you’ve specifically filed to be taxed as a corporation.
If you’re unsure whether your company has multiple members, check your formation documents or ownership agreement. If more than one person (or entity) owns a percentage of the LLC, it’s considered multi-member.
If you registered a C-Corporation, it’s always treated as a separate legal entity and must file a corporate tax return, regardless of ownership or activity.
If you’re still unsure about your classification, look at your IRS EIN confirmation letter or consult with Bookmate during a free consultation.
Step 2: Gather Financial and Ownership Details
You should begin gathering financial and ownership data in the last quarter of the year or as early in the new year as possible. This ensures you have enough time to meet tax deadlines without rushing or missing required documents.
Start by reviewing your business bank account and accounting software (if you use any) to pull together:
- Total income for the year
- Operating expenses
- Capital contributions (money you or others added to the business)
- Distributions or payments made to owners
Also confirm your ownership details: did anyone else join your business this year? Did ownership percentages change? Were there any payments between the business and foreign individuals?
If you’re not using accounting software like QuickBooks or Xero, export your business bank statements and manually review each transaction. You should be able to match each deposit and expense to a business activity. Organizing this now will make your tax filing much faster and more accurate.
Step 3: Prepare for Federal Tax Filings
U.S. federal tax obligations depend on your structure:
- Single-member LLCs (foreign-owned) must file Form 5472 with a pro forma Form 1120. This lets the IRS know about foreign ownership and any transactions between the owner and company—even if there was no revenue.
- Multi-member LLCs file Form 1065, which reports the business income and allocates profits/losses to each partner via Schedule K-1. If one of the members is a non-resident and received income, they may also need to file Form 1040-NR.
- C-Corps file Form 1120 annually. If 25% or more of the company is owned by a foreign person or entity, you’ll also file Form 5472 with it.
The due dates are different depending on your entity:
- Form 1065 (multi-member LLC) is due March 15
- Form 1120 and Form 5472 are due April 15
You can request a six-month extension by submitting Form 7004 on or before your original deadline. This gives you more time to file—but not more time to pay if taxes are owed.
Even if you had no income, skipping these forms can result in steep penalties: $25,000 per form per year. That’s why it’s important to file even if your business didn’t operate.
Step 4: Understand State Franchise Taxes
Many foreign founders mistakenly believe that only the IRS matters. But the state where you formed your company also expects an annual filing or fee. Most Bookmate clients choose either Delaware or Wyoming because of their founder-friendly rules.
- In Delaware, LLCs owe a flat $300 tax, due June 1 each year. C-Corps must file an annual report and pay franchise tax by March 1. The tax amount for C-Corps varies depending on how many shares you authorized.
- In Wyoming, both LLCs and C-Corps must file an annual report and pay a license tax based on the value of assets located in Wyoming. The minimum fee is $60, and it’s due on your company’s anniversary month of formation.
These state requirements help keep your company in “good standing.” If you skip them, you risk administrative dissolution, which could affect your Stripe account, banking access, or ability to raise capital.
Many founders use platforms like Firstbase or Doola, which offer reminders and help with these filings. If you’re not sure where to start, check your incorporation emails or your company registration dashboard.
Step 5: Review Payment Platforms and Bank Records
Why do we recommend reviewing Stripe, PayPal, and banking platforms? Because these are often where your actual revenue—and transfers to yourself—are recorded. The IRS expects accurate totals, especially for foreign-owned LLCs that must disclose all owner transactions.
Log into each platform and download the annual summary or transaction report. Compare this with your bank records. If you paid yourself from the business, make sure there’s a clear note explaining whether it was a reimbursement, owner draw, or some other type of transaction.
For C-Corp founders, unless you're on payroll, there should be no personal payments coming out of the business. If there were, those will need to be addressed carefully with a tax advisor.
Step 6: Prepare for Indian Tax Reporting
If you’re an Indian tax resident (meaning you lived in India for most of the year), the Indian government expects you to report all global income, including earnings from your U.S. company. You’ll also need to disclose any ownership in foreign companies and any balances in foreign bank accounts.
This is typically done through Indian tax forms ITR-2 or ITR-3, along with supporting schedules:
- Schedule FSI (Foreign Source Income)
- Schedule TR (Tax Relief for foreign taxes paid)
- Schedule FA (Foreign Assets)
We recommend getting in touch with a qualified Indian chartered accountant to help you complete this reporting. While Bookmate only handles U.S. tax filings, we’ll do our best to support your Indian accountant with clear documentation and summaries of your U.S. filings.
Step 7: Work with Bookmate to File Everything
Our team at Bookmate has helped hundreds of non-U.S. founders meet their U.S. filing obligations. We’re especially experienced in helping Indian entrepreneurs understand both sides of their compliance: U.S. tax law and how it interacts with Indian reporting.
Here’s what the process looks like:
- First, we schedule a free Zoom consultation to learn about your company and structure.
- We follow up with an engagement letter and invoice to officially begin the process.
- You’ll fill out a secure web form with your company’s financial and ownership details.
- We prepare all necessary IRS forms based on your situation—5472, 1120, 1065, and more.
- We submit everything by the appropriate method (e-file, mail, or fax), and help you respond to IRS notices if needed.
Everything is done online. You don’t need to mail anything, print anything, or figure it out yourself.
Final Thoughts
If you own a U.S. LLC or C-Corp from India, don’t wait until tax season to scramble. Start preparing now by identifying your structure, gathering documents, and understanding your state and federal obligations.
Bookmate is here to simplify the entire process. We help you meet your filing deadlines with clarity, accuracy, and peace of mind.
Book a free consultation or visit trybookmate.co to get started.
Disclaimer: This article is for educational purposes only. Every tax situation is unique. Please consult a qualified advisor or schedule a consultation with Bookmate.
