Can Entrepreneurs Who Do Not Reside in Usa Sell Products to Usa Without Paying Tax?
When deciding to form an llc in Usa, taxation is one of the most curious topics. Some of the most frequently asked questions are:
- I formed an llc in Usa, do I pay taxes?
- I have an llc in Usa, but I do not reside in Usa, but I sell products to people in Usa. Do I pay taxes?
- I sell products to US citizens residing in Usa via Dropshipping. Do I pay taxes?
- I do Amazon FBA, do I pay taxes?
- I own a consultancy or digital agency. I sell digital products and services. Do I pay taxes if I sell in Usa?
- If I do business in any of the above mentioned fields and sell products to any part of the world outside the USA, will my company or I in the USA pay taxes on this sale?
If your work covers any of the above statuses, you do not pay taxes up to a certain level in America. (Within limits) It is only necessary to fill out a form called 5472 and file it with the IRS every year. For details, it is useful to take a look at Form 5472 for LCCs outside the USA
But there are some conditions to this, and even though you don't pay taxes, you may have a responsibility to file an annual return with the United States Internal Revenue Service (IRS).
How is Income Tax Status Occurred?
Amazon, Etsy, Ebay, Stripe and 2checkout platforms through your LLC company established in the USA, they will send you a 1099-K form as soon as you exceed the limits.
Once you receive this 1099-K form that the payment gateways or marketplaces will send to you, a 1040-NR income tax return will now be required.
There may be some limits and criteria depending on the work you do and the situation of your company, the important thing is to be aware of this and work with a competent CPA in this process. Because a CPA who specializes in this field will process all your expenses and support you in paying ridiculous amounts of taxes. at this link to access the list of CPA (consultants) who specialize in this field .
On this page, we will talk about the tax procedures applied in America for non-resident aliens or NRAs. If you are not any of the following, you are NRA.
- Usan citizen
- US permanent resident or green card holder
- A person who has lived in the United States long enough to pass the Usan means test
If you are not in any of the above statuses, there are two regimes applicable to you, one of which is the passive regime and the other is the active regime.
What is passive regime?
When you earn certain types of passive income, for example, interest, dividends, royalty income, real estate income. Such types of income fall into the passive regime status and are subject to a fixed 30% tax bracket. Every individual who earns this type of income must and is required to pay taxes to the US government.
We can briefly summarize the passive regime as follows; the status of those with this type of income is slightly different. Without further ado, let's move on to the other regime type.
What is an active regime?
Active regime is the taxation of income generated by an active operating business. It is a completely different type from the one above. To summarize, it works as follows;
- If a person is engaged in trade within the United States of Usa and earns income from this trade, he/she is subject to "ETBUS".
- You become ETBUS only if these two elements occur (if these two definitions suit you).
- 1: If you have at least one representative in Usa who is dependent on you (who is dependent on you on paper, is your representative, or handles your affairs for you), you become an ETBUS.
- 2: If you have a physical branch, office or workplace located in the USA and carry out commercial activities through them, you are an ETBUS.
Now let's detail these two important items and clarify the situation.
What Does Dependent Delegate Mean? (NEXUS)
Your dependent representative is the person and organization that officially works with you and handles your business. In fact, we can say that it is the official representative of your business there; to summarize a little more, it is the official person or people you employ in Usa.
- One or more people who officially do work independently for you.
- One or more dependent people who officially serve you
What Does Independent Representative Mean?
It is your representative who resides there and carries out your affairs in Usa, but has no official ties with you. Every action of this representative is his/her own and has nothing to do with your actions. It has its own company, pays its own taxes and continues its own activities. Although it indirectly benefits you in your work, it does not officially depend on you, it is not your employee or partner.
Using an independent agent or its services for your own purposes does not constitute the conduct of a business based in the United States.
Economic Nexus Triggering
You may not have any branches or ties in the USA, but if you exceed the turnover and transaction limits allowed by the states, this creates an economic bond with you. We have discussed this in a separate topic, please here .
The reason why this situation is completely misinterpreted is
We see that some tax experts rightly interpret the situation differently regarding taxation, and we encounter this type of information a lot. Tax experts do not go into too much detail and follow standard tax procedures unless you specify otherwise. When you do a little research and talk to a tax lawyer who specializes in this field, you will see that the situation becomes clear.
The tax system in Usa is evaluated in two separate concepts: local source and foreign source. In general, a normal tax expert argues that if you sell a product to Usa, you should pay taxes. In other words, experts adopt the view that a product or service sold in Usa must pay taxes to the state.
But tax lawyers disagree;
A non-U.S. citizen must declare income to the U.S. government only if that income is “effectively connected with a trade or business in the United States,” i.e., ETBUS.
If you do not have a dependent representative, if you do not have a physical branch in Usa, if you are not a US citizen, and above all, if you are not an ETBUS, you do not need to pay any taxes to the government. Only if you exceed the transaction and turnover limits of the states, you need to collect sales tax from your customers, in which case you may have an economic connection and an income tax situation may arise.
If the parts up to this point are not convincing, you are free to do research and get consultancy as you wish. Our aim is to make the situation more understandable in a way that will be beneficial to every entrepreneur after obtaining the correct information.
On the other hand, the USA has many states, and in almost all of these states, companies are constantly formed by non-US persons.
Considering the existing ones, we can say that there are too many foreign companies in Usa. Naturally, in this case, new companies need tax experts, and these experts provide services by filling out their tax returns. Since it would be quite natural for tax experts to prepare returns for a fee and earn money from this work, their decisions about being subject to tax are unlikely to change much. After preparing the declaration voluntarily and paying the tax to the state within the framework of the law, no one will say "this money is too much" and not give a refund. That's why it looks like this situation will be discussed for a long time.
So, does the situation change if you operate remotely as an LLC company?
Single member LLC companies (SMLLC Single Member LLC) are not considered a full company in Usa unless you apply. Single-member LLCs are actually considered a sole proprietorship. For this reason, if you are going to open an LLC in Usa and do this kind of business, forming a single-member LLC company is a logical and low-cost solution.
Does receiving payment in dollars from a bank in Usa change the situation?
The result does not change. The currency you trade with and the location of the bank where that currency moves are irrelevant. If we look at the situation on the banks' side, they are only interested in whether you are an ETBUS or not.
I do e-commerce in Usa and my website is hosted on a server in Usa, what happens?
Again, it does not change because the server company is not your dependent representative. Not your partner or salaried employee.
Will I Pay Taxes in Turkey for the Money I Transfer from the USA?
If you regularly receive large amounts of money from abroad into your accounts, why not, if you attract the attention of a tax or bank inspector. If the money you transfer from abroad to home starts to exceed your allowance amounts, it would be beneficial to hire a consultant from Turkey and report the situation to your tax office.
In addition, in cases where the tax of the company in the USA is paid in the USA, it will be beneficial for you to convey this issue to your consultant in the USA in order to avoid double tax (International tax agreement).
The essence of the matter is that if you will have large or close to large transaction volumes (it is not possible for us to know this amount because we are not accountants or consultants, gib.gov.tr or call the revenue administration to get information), you are obliged to pay income tax on the money you bring into your own country, without ignoring the tax agreement between the two countries. .
Forming an LLC company in a reasonable state in Usa
Since you have read everything above and all the questions are clear, the smartest thing to do is to form a single-member individual LLC company in Usa. The costs that will be incurred here are already clear from the very beginning. No surprise. You can start your business from home through a registered agent by forming an llc in a state with low annual filing fees.
States like Kentucky, New Mexico, or Wyoming have very low annual filing fees ($15 to $62). There is no annual report payment in New Mexico. Recently, New Mexico seems like a very logical choice among these states. If you want to establish an LLC company in the state of New Mexico for a fee of $89, New Mexico LLC Establishment .
You can choose a state according to the work to be done. For example, while the state of Wyoming makes more sense for Amazon, choose New Mexico for other classic e-commerce, software and consultancy businesses. this article about state elections .
Advantages of forming an LLC company based in Usa:
- In Usa, you can receive money from a customer or customers to your bank account with a credit card. You can easily transfer this money to your country.
- If someone sues the LLC, the company will shield you.
- A buyer from the USA more easily trusts a seller from the same country. This may give you an advantage if you choose to publicly display the state in which you formed your LLC address.
Do not find it scary or difficult to open a bank account in America, there are now some banks that support entrepreneurs, you can easily open an account remotely. Since Mercurybank will be a logical choice for receiving payments with Stripe, this guide .
We have come to the end of a long and useful article, we hope it was useful for you.
Sources: https://www.avalara.com/taxrates/en/state-rates/kentucky/kentucky-sales-tax-guide.html https://ustax.bz/ https://www.irs.gov/instructions /i5472 https://gwcarter.com/us-tax-guide-for-nonresident-aliens-with-single-member-llc/ https://blog.taxjar.com/economic-nexus-laws/ https:// oandgaccounting.com/form-5472-filing-exemption-for-foreign-owned-single-member-llcs/
61 Comments . New Comment
Good evening Mr. Nazmi, I have been following your blogs for a long time, thank you very much for creating the best content we can find in Turkish.
I sell through my own store from Shopify, I received form 1099K from Shopify Payments at the beginning of the month. I will file 1040NR regarding this.
My first question is, in addition to this tax return, does the receipt of the 1099K form also require me to collect sales tax from all states? When I checked my Shopify reports and the state table you shared, I have not yet exceeded the limits in the states.
Secondly, since I could not open PayPal in Usa last year, I opened and formed a UK company. I used two companies, two bank accounts in two countries, and things got very complicated. Shopify Payments deposited it into my US bank account (Mercury bank), PayPal deposited it into my UK bank account (Wise). I also paid employee salaries from Turkey with Ziraat Bank. Can I deduct these expenses on my 1040NR tax return?
Do you know a CPA you can recommend who is competent in Shopify with whom we can solve this problem, or can we arrange a meeting with you and solve it?
Regards,
Hello, thank you for your positive thoughts.
1. Receiving a 1099 K does not mean you exceed state limits. A 1040-NR must be filed.
You can order for 1040 Nr declaration with SOLE100 coupon from this link: https://www.tammentor.com/courses/1040nr-single-member-llc-tax-return?ref=90fc42
2. Ask the financial advisor about this issue during the post-order consultancy search, he will probably suggest a suitable path, because things seem a bit complicated.
3. Yes. You can order tax lady for 040 Nr declaration with SOLE100 coupon from this link: https://www.tammentor.com/courses/1040nr-single-member-llc-tax-return?ref=90fc42
Consultants will contact you after the order and provide consultancy within the service package (including ITIN number). Since there is a Turkish-speaking team, you can communicate easily.
have a nice day
Well, our business did not go well, can we close the company without any problems, thank you
You can close it down, it is more expensive to close Delaware companies, but especially in Wyoming, it can be dissolved in a simpler and less expensive way (as far as installation).
If we open an llc in Usa, will there be any problems in the future? Is there anything to fear or worry about? Thank you.
Why should there be a problem if you only fulfill your responsibilities by doing business legally and filing your annual returns?
Hello, we have an llc company in wyoming, USA. We reside in Turkey. We do not have an llc in Turkey. We will sell on Amazon as FBA, I would like to ask the following question, we want to send a product from Turkey abroad, that is, to Amazon's Usan warehouse, but we could not figure out how to do this while this product from Turkey is going to customs and the VAT of the purchased product is paid. We could not figure out whether Amazon itself handles the legal aspects of the matter or whether the invoice is issued to the logistician we have agreed upon and whether it is on our personal identity. Do you have any information about how it happens? Thank you very much if you answer.
Hello,
It would be beneficial for you to consult a foreign trade expert or a financial advisor on this issue. We do not have information about such services.
Bro, I'm thinking of opening an llc in the USA through Northeast. Will this company generate active or passive income (I'm thinking of dropshipping)
Dropshipping is a passive income. If you do not effectively have a physical warehouse or office in the USA, you can qualify it as passive income.
If the person does not generate income from the activity and the price paid is a wage, there is income tax exemption.
– I also have plans to buy a house in Ohio.
In this case, if I open one LLC for the house in Ohio and one for my wife's consultancy in Wyoming,
I will file a tax in Ohio on real estate rental income. At the same time, if my Wyoming company provides consultancy services to this company, that is, if my Wyoming company does business for my Ohio company under 100k$ and 200 transactions (i.e., it issues a single invoice of 99k$ per year), and I show my spouse as an employee of the Ohio company in Turkey:
1) Since I am a TR resident and all the income of the Ohio company is generated in the USA, the wage income I will pay to my spouse in TR will be exempt from income tax in TR.
2) Since the Wyoming company falls under ECI limits and is owned by a Non-Resident partner, it is not subject to tax.
3) Since I will invoice through Wyoming for the consultancy services I provide at TR, I do not need to declare taxes on my TR Service income in my Wyoming company.
4) I will pay only 10% income tax since I have reduced the taxable income to less than $10k as I have deducted the consultancy expense I received from my Wyoming company from my rental income in Ohio and the salary of my wife, who is resident in TR and is a TR employee of this company.
Can I make an inference?
It was a little complicated, though. I wanted to get your opinion
It is a very complex situation and it is very difficult for us to comment on this as your situation is outside the standards. If you wish, get a paid consultant consultancy from the link below, otherwise the comments made here will mislead you.
However, this is a clear situation: You cannot show your spouse residing in TR as an employee of an llc in the USA, you can only employ insured US citizens.
https://www.tammentor.com/courses/danismanlik?ref=90fc42
Hello;
We are considering establishing a remote software company in America. Our field of activity is software, so we want to make mobile games and publish them on the apple store and google play store. In this case, how much will be the income tax on the income earned? Does the United States also charge income tax on earnings earned in other countries?
Hello,
Your advertising revenues will be paid by Google to your LLC company's commercial bank account in the USA.
For this reason, Google will send you a 1099K tax declaration form at the end of the year, of course, this tax declaration form is simultaneously transmitted to the IRS. At this stage, it will be necessary to declare year-end taxes.
After deducting all your expenses and expenses, you pay your federal income tax at the rate your advisor tells you. We cannot calculate the rate you will pay because many variations need to be known to calculate this, but do not worry, it is not too intimidating.
Thank you very much for all the information. As I become more informed, my anxiety decreases and this platform has a great impact on the issue.
My question will be simple and quick-witted. I ask questions to confirm what I have learned.
I will sell products from China in America with Shopify, and I think I need to file a tax return with the LLC I opened in Wyoming by April 15. Other than that, I think there is nothing I need to do. However, there are some issues I need to clarify. If I haven't declared that I will be doing e-commerce with my company, do I need to get a qualification number to declare it like in Turkey? Or do I need to submit any other documents and get permission to start business before doing e-commerce? Otherwise, the only thing I understand is: After receiving the EIN number, I open my bank account and Stripe, make sales from the site and keep the preliminary accounting. To file a declaration in April and continue my job. You suggest that if I sell above a certain turnover, I should talk to an expert anyway. If I understand correctly, I want to collect taxes from the states with peace of mind and spend effort on my main job by doing preliminary accounting.
Thank you for your interest in advance.
Kind regards
You're welcome, it's nice that our platform is useful. As for your questions;
You need to submit the previous year's declaration by April 15th, that is correct, you do not need to do anything other than that.
You do not need to declare any e-commerce or business class; a NAICS Code related to your business is written in the document when the declaration is made. Apart from that, there is no need to declare a business code to the state or anywhere else because there is no such application.
Your following application is correct and you have understood it correctly, it will only be useful to keep the preliminary accounting of the commercial activities during the year with a software. Since the software is already integrated with the bank, it can keep all income and expenses. All you have to do is add documents such as a receipt, memo, invoice, etc. to the expenses you have made.
Don't do anything else and focus on your main job. There are actually three items you should remember.
1. Renewing the registered agent on time
2. Paying the Wyoming state fee (64 USD) on time
3. Filing a tax return every year
When you do these on time, your business will continue in a healthy manner.
Good luck and good luck.
Hello. First of all, you have created a truly incredible platform. I can find answers to all the questions that come to my mind. Thank you very much for this.
I am also in the process of establishing a company in Wyoming. I will soon start my e-commerce activities with the service and support I receive from you.
The tax issue is important and it is necessary to master all the details before starting.
While I'm waiting for the company to be established, there are a few questions I'm looking for answers to.
1. Is there an obligation to show sales tax (watt) on the invoice / checkout after making a sale?
2. If so, do each state have different sales tax rates?
3. Do sales I make outside the USA affect state limits?
I will read all your articles written on this subject. But I would be very happy if I could get clear information from you.
Thanks
Hello
1. If your income is from the USA, that is, if the place where you sell your products and receive the payment is the USA, you can add watts to the sales price, but it is better to do this after reaching the state limits because you do not increase the price in vain. Every state has limits, you can look them up on the blog and collect sales tax if you get close to the limits. If the volume will be low, there is no need. There is no need for sales tax on sales outside the USA anyway.
2. Yes, the rates are different in each state. Search the blog, there is a table of sales taxes by state.
3. State limits do not affect income from states within the USA.
We kindly request you and wish you luck.
Hello dear admin.
I heard that VAT must be written and collected when invoicing people in Turkey and that it must be paid with a VAT 3 declaration. VAT is not recorded when deducted to Turkish companies, and the companies themselves pay by filing a VAT 2 declaration. There is also a tax called Digital Service Tax (DHV), that is, Digital Service Tax (DST), I think this is VAT 3. https://digitalservice.gib.gov.tr . Companies register and pay at this address. Have you ever billed a person? Do you have any information about this?
There is a lot of wrong information floating around. I wanted to ask you too. I would be glad if you share your experience.
Thanks.
Hello,
Unfortunately, we have no information on the subject. It would be beneficial for you to ask a Turkish consultant about the issue and get information.
Hello.
Are the "representative" and "registered agent" mentioned in your article the same? Because I'm confused.
Hello,
The term "representative" in the article does not mean registered agent. You can think of it as a person representing your company in the USA, an llc employee, that is, a representative office that connects you to the USA.
We translate registered agent as legal representative, but do not think of it that way. Registered Agent does not make you an etbus, it is just your representative who receives documents that may come to your company on your behalf and accepts lawsuit subpoenas.
Hello,
First of all, thank you for this information-filled website and your valuable answers. I am planning to receive company formment services in the state of Wyoming for the purpose of the Amazon FBA business model. As for my question, I understand in the light of the information on the site, as soon as the company is opened, we use a pre-accounting web software such as freshbook to calculate income and expenses. We will keep it and at the declaration time we will make an agreement with a one-time accountant and have him make the declarations, right? Or will there be no need for a preliminary accounting program in the FBA model since the records are available on Amazon? Thank you for your interest. I wish you good luck.
Hello,
You're welcome, thank you for your positive thoughts.
Freshbooks does not provide full automation. Quickbooks is actually the most used software for marketplaces with intense checkouts, such as Amazon. Freshbooks is used for small projects designed more amateurishly.
Yes, you understood correctly. After forming the company, obtaining an EIN, opening your bank account and transferring the Amazon side to a business account, the first thing to do is to integrate a pre-accounting software such as Quickboks into the systems (both Amazon and Mercurybank) and keep the records in a healthy way.
As soon as you receive a tax notice from Amazon that needs to be reported, you can ask your consultant to quickly calculate the tax by authorizing him to see the accounting records from Quickbooks. In this way, thanks to the software, the process is accelerated and your accountant costs are reduced. In fact, no consultant wants to hire the accounting staff of any company that does not have this type of software. Ultimately, they set their prices according to the time they spend. As you know, when paying taxes, you will need an ITIN, which is an individual tax identification number, and the consultant will ask for it from you. Of course, if you do not need to pay taxes (due to low turnover or other reasons), ITIN will not be needed, but in any case, you will have formed a healthy system.
I would like to underline this part by excluding you;
Generally, accounting and tax issues make people think a lot, instead of devoting time to the points that need to be focused on: What do I pay? How much does it cost? How much does an accountant earn? What percentage tax do I pay? Will I make a loss? They are looking for answers to dozens of repetitive questions such as: Instead, it would be wiser to focus on growing their business and generating more turnover. In fact, everything is clear since the procedures that need to be done are clear. But sometimes there are people who try to solve the problem at zero expense by looking for an escape in the opposite direction. It is necessary to know that it is impossible to build a healthy and sustainable infrastructure without some costs.
Good day, What I want to ask is,
1- When FBA is done through Amazon after opening a company in the USA, Amazon already collects sales tax as you explained, in this case, is there any tax that a one-person LLC must pay annually? (Exceeding state limits on an annual basis, etc.)
2- If we are only going to do an FBA model, is it better to get a Mercury bank account or wise or pioneer, and to avoid any problems in transferring the earnings to the account in Turkey,
3- Paying taxes in the USA or (in case below the limit) In case of non-payment, will the money be subject to tax again when transferring it to Turkey, due to the tax agreement between the USA and Turkey?
1- Unless you exceed the limits each year or receive a 1099K tax alert form from Amazon, you are required to file Form 5472 as a single-member foreign LLC owner. If you receive a 1099K, you must pay federal income tax on a return called 1040NR. At this stage, it is useful to collaborate with an accountant.
2- If you are going to make a trade, you must already have Payoneeer, Wise and Mercury accounts. Because you do not need to keep a balance and pay a fee, you can already open a mercury and wise account with your company, we can say that they are all advantageous, so open these accounts.
3- While transferring the money to TR, the bank may report you to the tax office when a large amount comes from the same place. Situations may arise where part of the tax must be paid in the USA and the other part in TR. You will receive support from an expert accountant in this regard (after you earn income).
By the way, you can still benefit from asset peace by filling out a form at your bank when bringing your money to TR. This still continues. If you declare the amount you brought, you do not have to pay tax in TR. You can also confirm detailed information on the revenue administration's website.
Thank you for the information, finally, wise and payoneeer, which one has the lower commission in terms of money transfer, which one do you recommend ^^
Wise is more cost-effective, you can automatically convert your existing balance into many currencies and transfer it to the country you want.
Thank you ^^
Hello,
I find your articles very valuable. First of all, I would like to thank you. As you know, the peace agreement for foreign assets ends this year. In some sources; It is said that the money from the LLC will be withdrawn to the Turkish account thanks to the asset settlement and will be exempt from taxes both here and in the USA this year.
This seems reasonable on paper since I have resided outside of the US for more than 180 days, but I wasn't sure. Is there such a possibility that you know of?
Tax peace ends on December 31st. If you apply to your bank and bring your money by this date, your bank will not report you to the tax office. If you register the money you will send to Türkiye in this way, you will not have to pay taxes in TR within the scope of peace.
Income obtained from the USA is taxed there. It does not include the tax peace in TR. If you have an income tax in the USA, you can pay it there and take the remaining money to TR within the scope of peace.
Hello,
First of all, thank you very much for creating simple and qualified content. I read each of your articles carefully and with curiosity.
I aim to establish the company in the state that best suits my personal plans. For this reason, I focus on the possible taxes I may pay in the future rather than the installation costs.
As you stated in your article, when we exceed the transaction or turnover limits of the states, we need to collect sales tax from customers, and since an economic bond is formed, we become ETBUS, and therefore we have to pay income tax.
My question is, even if we make 1 sale, should we describe ourselves as ETBUS in this business model because Amazon collects state-by-state sales tax from the customer on our behalf?
Thanks,
Hello, thank you for your comment.
If you are going to sell on Amazon, you have no business with sales tax. Amazon collects and pays sales tax itself, and it does not concern the seller.
If you are doing dropshipping or e-commerce from your own site, then you are responsible for the sales tax.
So those interested in Amazon do not need to think about this situation.
Hello
I buy products from Usa and sell to Canada. Currently, my company is in Turkey. I want to open an llc in Usa and manage it from here. I have one partner, but is there much difference between a two-partner LLC and a single-partner LLC? I'll give you an example: I sell a product I bought for 100 dollars for 120 dollars. Should I calculate the annual turnover based on 20 dollars or 120 dollars?
Hello,
Yes, there is a difference: a single-member LLC (called SMLLC) is like a sole proprietorship, so it is taxed as an individual and is considered a disregarded entity in the USA. But a multi-member LLC (called an MMLLC) is taxed like a real corporation. Although their structures are not very different from each other, they have differences in tax terms. When you obtain an EIN number after forming an llc with multiple partners, the IRS taxes you as a real company, based on this information. When getting an EIN number, you need to indicate in the SS4 form that the company has multiple members. If you get an EIN service when forming an llc through an agency, they will fill out your form accordingly... When you show the records to your accountant at the end of the year, they will calculate the income and expenses according to the multi-member LLC and take action accordingly.
Turnover is the sales price, not profit. When the product bought for 100 dollars is sold for 120, you will make a profit of 20 dollars and have a turnover of 120 dollars.
Hello,
the articles are great, thank you very much.
I will earn an annual income of 80,000 USD from a US online sales site (to be paid in 2 payments). What do you think would be the best option to establish a company? In which state would it be more advantageous if I open a company? By the way, the name will always be this way. This payment will come regularly, that is, every year. If we make a rough calculation as follows:
Turnover: 80,000USD
My Expenses (Material+Advertising+Cargo(Billable Expenses)):40,000USD
There is no one to whom I will pay salary.
And let's say I opened my company in Wyoming, how much will the average total taxes be?
I would be very happy if you could give me some brief information.
Thanks
Hello,
It is not right for us to calculate taxes on a platform that is legally open to everyone. I'm sorry, I recommend you get advice from an expert for this.
https://startupsole.com/amerika-muhasebe-firmalari/
hello again. very nice platform. My question is,
how much will we spend annually? There is a tax (state and federal) register agent and an accountant fee. . Can we manage an llc without accounting with an agent?
How much limit does the irs give us as foreigners?
We formed it with Register Agent. Can we leave without annual renewal? We need to contact an accountant.
Accounting is a separate topic, I've already talked about it. You can change your registered agent for free for the first year, you can switch to a different agent the next year by paying. But neither the accountant nor the registered agent provides the service, they are two completely different issues, both are necessary for you.
Hello,
Tax is a situation with many variations, and in fact annual expenses and taxes should be in separate items.
1. Annual registered agent fee varies between $99 and $120
. 2. Annual filing fee depends on the state, for example, Kentucky is $15, Wyoming is around $40-50.
3. Registered agents are not accountants and they do not provide this service, they only represent you there and handle correspondence from the state. They will transfer it to you, of course, they are not related to a lawsuit or any other business other than that.
4. Regarding the IRS, when you use platforms such as Amazon or Stripe, when your income from the USA reaches around 20,000 dollars (year), these platforms send you a form called 1099. When you fill it out, it automatically goes to the IRS and you will now have to pay income tax to that year. At this stage you need an accountant. If you find a good CPA that can reduce your expenses, you will gain a tax advantage.
Note: This information is provided generally for a single-member foreign LLC and should not be considered tax advice as it may vary depending on your situation, business type, turnover and state.
Have a nice day;
I am an application developer and I want to start a company in Delaware. I receive payments from Google, Apple and other advertising companies. How much of my total annual income do I pay in taxes?
It is important how many of your customers are Usans and how much annual turnover you make from them. The tax you will pay will vary accordingly. Keep a record of your transactions. Your accountant will inform you at the end of the year. It is impossible for us to say this based on your future plans.
Hello,
Thank you very much for your efforts, Can you make a general evaluation and comparison about tax rates among the states in America, Delaware, Wyoming, Kentacky etc., Eticare, Online Business Issues, For example, there is no Stae Fee in Wyoming, but there is no Sales Tax in Delaware, First Establishment It is affordable, it may not be suitable for the same advantages in terms of operation and taxation of goods, your evaluation and point of view is important to me,
thank you...
Hello, thank you for your comment and feedback.
Yes, as you mentioned, the taxation system varies in each state. There is no such comparison at the moment, but perhaps such a table can be created in the coming days, taking into account your feedback.
Although there is no collective comparison table, detailed pages have begun to be created for all states. In fact, there is summary information about the questions you ask in the taxation tabs on these state pages. You can browse from the category below. It will be added here in different states as time permits.
https://startupsole.com/usada-company/eyaletler/
Hello, I read all your articles with interest. Thank you for providing very useful information.
I founded an llc in Wyoming and I have been doing software work initially through Upwork and as a freelancer in European countries.
But I'm also interested in LEGOs as a hobby and I buy/sell them (in very small volumes). If I use my Stripe account connected to my company to receive payments for these sales, will there be anything I need to pay additional attention to regarding taxation?
(I use the cash accounting method)
Hello,
Congratulations on your initiative. The financial volume of the extra work you do and your turnover are important. If it is not at significant rates, you do not need to do much in terms of accounting. However, if the volume is high, you may need to collect sales tax. Other than that, you don't need to do anything, keep your sales records, I think you can take action according to the financial situation at the end of the year.
Thank you for your answer. The annual volume of this work does not exceed $2500. I think we can consider it as quite small in terms of volume. Compared to the volume of my other business, the rate is around 1 in 25-30.
As you said you will keep sales records, can sales tax be collected at the end of the year?
So, I think this turnover will not cause you any problems. Sales tax varies depending on your turnover and how much you sell to which state. When you start exceeding the limits, you start collecting it, which depends on how much sales you make and the number of transactions in which state. In fact, there is no such line, that is, when you exceed the transaction limits by 1 dollar, there is no need for immediate action, there is a buffer value at certain rates. You can evaluate it according to the progress, or for the sake of guarantee, you can monitor the states where you start to make a lot of sales through the e-commerce platform you use, automatically add the rate of that state to each sale, increase the price, record it and explain the situation to the accountant at the end of the year.
Generally, if you exceed the limits, Stripe will send you a notification (form 1099 K) at the end of the year and you must report this to the accountant.
Believe me, the taxation there is multifaceted and varies according to many variations. I don't want to give wrong information, but these rates seem to not cause any problems, but if you want, read this topic as well
https://startupsole.com/abd-vergiloji-form-5472/
And a quote from O&G I suggest you get 10 minutes of free call support.
How will Amazon collect sales tax in the USA? Will we notify each state? Could you please give me information about this?
If you are selling on Amazon USA, you do not need to collect sales tax because Amazon does this for you, and even most marketplaces do this. We can say that this situation is mostly valid for sales made through the website.
Hello. I can tell you personally, the content of your site is very full. We can find answers to all your questions with detailed explanations. First of all, I would like to congratulate you in this context.
What I'm wondering is; You say that single-member LLC companies are like sole proprietorships. I had a sole proprietorship in TR and I could use my personal credit card for my expenses. Is such a situation valid in Usa? As you know, when we form the company, Mercury does not give credit cards, we will have to make all purchases with the cash in our account.
Hello,
We are glad that you like our content, we try to keep it very up-to-date and full. Thank you.
In fact, it is like a sole proprietorship in tax terms. In other words, while the company's income is taxed, the income passes directly to the company owner, so it can be considered as a sole proprietorship. For this reason, single-member LLC companies are considered disregarded by the IRS.
Credit cards are not provided to those who do not reside in the USA and do not have an SSN, even if they own an llc. For this reason, non-citizen company owners can open accounts in digital banks such as Mercurybank. As you mentioned, Mercurybank issues a prepaid debit card to every business owner. You can add balance to the card and use it for purchases (with the money coming into your account) by returning it from this card.
Some financial institutions can provide credit cards, although rarely, but they require an ITIN number for this. Just owning an llc is not enough to benefit from loan and credit card advantages.
It's going to be a different topic, but I wanted to link it. What can be done to avoid paying sales tax when purchasing products/services from retail stores with our Mercury account for arbitrage? If I'm not mistaken, you can buy goods with your sales tax ID when doing wholesale.
I think a resale certificate was required from the state for this, so you do not pay sales tax to the wholesaler you buy goods from.
It would be beneficial to consult an Amazon expert.
Hello teacher,
2: If you have a branch, office or workplace located in America and carry out commercial activities through them, you can become an ETBUS. According to this sentence, does the virtual office service purchased through sasquatchtmail.com in America result in ETBUS?
Maybe if it were physical, but it wouldn't have a virtual effect on the person.
Hello.
So, since we are not ETBUS, I guess our only responsibility is to fill out forms 5472 and 1120 and send them to the IRS. If so, do you need to hire a CPA to do this?
Yes, it is correct, the liability is written in the IRS regulations. These forms require advanced accounting and knowledge of the legislation therein. These forms must be filled out and filed by an expert every year.
We have an article about the correspondence we had with an expert CPA on this subject, I leave it here.
https://startupsole.com/abd-vergişma-form-5472/
So, what happens if we exceed the state limit? Is there an automatic notification from the IRS, etc., or are these limits just legal rules and regulations, but there is no audit?
Regardless of Stripe or any other payment channel, they automatically report online to the IRS. Legal sanctions and penalties may occur if sales tax is not collected during these reporting.